How Tea Party tax cuts are turning Kansas into a smoking ruin

"States considering deep tax cuts in hopes of sparking a surge of economic growth should look carefully at Kansas," ...  Yes, look carefully -- and run the other way!

By Michael Hiltzik
LOS ANGELES TIMES

Sam Brownback, the Republican governor of Kansas, doesn't just believe in whistling past the graveyard--he's willing to stroll past it in full-throated song.

The graveyard is where the economy of Kansas has been buried since 2012, when Brownback and his Republican state legislature enacted a slew of deep tax cuts in a tea party-esque quest for economic "freedom."

Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy.

"Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy," he promised then. Brownback's tax consultant, the supply-side guru Art Laffer, promised Kansans that the cuts would pay for themselves in supercharged economic growth.

Instead, job growth in Kansas trails the nation. The state's rainy-day fund is dwindling to zero. Month after month, revenue comes in even lower than fiscal officials' most dire expectations.

In the rest of the country, school budgets are finally beginning to recover from the toll of the last recession; in Kansas, they're still falling. Healthcare, assistance for the poor, courts, and other state services are being eviscerated.

Who's benefiting? The rich, including those proud offspring of Wichita, Kan.: the Koch brothers.

Despite all this, Brownback resorted to an op-ed in the Wall Street Journal a few weeks ago to declare that "the early results are impressive." Among other statistics he cited, "In the past year, a record number of small businesses — more than 15,000 — were formed."

Yes, but as shown by the Center on Budget and Policy Priorities, a Washington economic think tank, 16,000 disappeared. And many of those businesses that Brownback crowed about were surely created to take advantage of one of the tax-cut quirks Brownback enacted. This is the elimination of all taxes on partnerships, sole proprietorships, and LLCs that pass through their tax liabilities to their owners. That allows everyone from freelancers and petty contractors to huge partnerships to avoid any state income tax at all, as long as they're organized as a certain type of "small business."

Brownback's policy, and his claims about its outcome, define the term "ideological" -- the imposition of preconceived notions on a contradictory reality.

The record of Kansas since 2012 shows the folly of such draconian cuts in revenue. It's one thing to enact targeted cuts in tax rates during an economic upswing, when such a policy can add fuel to job generation. It's quite another to do so blindly during a slump, when cuts in state services undermine efforts at recovery.

Brownback's tax policy came right out of the conservative playbook. His 2012 package cut the top two personal income tax rates from 6.45% (on income over $60,000) and 6.25% (on income between $30,000 and $60,000) to 4.9%. The rate on income under $30,000 was pared to 3% from 3.5%. Pass-through business income was made fully tax-exempt. The law increased the standard deduction, but also eliminated several tax credits that assisted the poor....

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"Gov. Christie seems unwilling to acknowledge that N.J. jobs crisis is real"

This Times of Trenton column by New Jersey Working Families Alliance Director Bill Holland, pointing out Governor Chris Christie's failure to adequately deal with or even acknowledge New Jersey's jobs crisis. Instead, the governor insists on doubling down on the discredited trickle-down policies of the past.

Times of Trenton

By Bill Holland

On Tuesday, Gov. Christie released the fourth and final budget of his term. Legislators and advocates will spend the next weeks poring over the budget to see what’s been funded and what’s been cut. But just as important as what is in the budget is what Christie seems to have left out: a comprehensive plan to deal with the state’s jobs crisis.

Unfortunately, the governor seems unwilling to acknowledge that the jobs crisis is real, much less to offer viable solutions. Instead, he doubled down on what has so far been his only big idea for jobs creation: paying off corporations in the hope that they will someday create jobs. In his budget speech, he touted more cuts for business. His budget summary also includes $2.3 billion in “targeted” tax breaks for corporations – meaning yet more subsidies and tax credits for businesses.

The problem is that these corporate giveaways haven’t been very good at creating jobs. In 2011, Campbell’s Soup took $32.4 million while laying off 130 workers in Camden, one of the poorest cities in America. That same year, the state also awarded $12.3 million to Citigroup to move New York employees to their New Jersey offices. Citigroup took the money and then cut 276 New Jersey jobs in Bergen County two months later. And Christie’s tax break for the developers of Revel Casino has been a spectacular failure. Just last week, the troubled casino announced it’s filing for bankruptcy.

We’ve tried corporate welfare for the last three years and it simply hasn’t worked. While other states are recovering from the 2007 economic crisis, New Jersey seems stuck in a rut. The state’s unemployment rate is the fourth-highest in the nation and it ranks a dismal 47th in economic growth. Pennsylvania has already restored 75 percent of the jobs lost there since the start of the recession. New Jersey has only restored 35 percent. If we stay on the same course, we’re not expected to return to pre-recession employment until 2018.

Worse yet, corporate tax cuts have come at a cost to working families in the form of higher tuition, transit fares, public school fees and property taxes. It’s also led to cuts to pro-employment programs such as the Earned Income Tax Credit, affordable after-school care and funding for our public colleges and universities. Non-partisan think-tank New Jersey Policy Perspective found that without the governor’s budget cuts, our unemployment rate would be down a point or more. Instead, working families are paying more, getting less and looking for jobs that just aren’t there.

Christie has it backward. Instead of buying the wealthy off with ineffective tax breaks and paying for them with budget cuts, he should be asking the wealthy and corporations to pay their fair share so that we can invest in strong, safe communities, a well-trained work force, a quality transit system and the fundamentals we need to make New Jersey a great place to live and do business.

There are better choices available to him. Ending his tax cuts for the richest 1 percent of New Jerseyans could generate more than $1 billion in revenue that could help make college more affordable, keep our streets safe, and invest in transit and green jobs creation. Ending the corporate tax breaks included in this year’s budget could save $540 million more this year and much more in the years to come.

New Jersey can’t afford to double down on trickle-down policies that have failed us so far. We need a real jobs program and a way to pay for it. Legislators should have the courage and vision to fight for both this year.

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Bill Holland is executive director of the New Jersey Working Families Alliance and coordinator of the Better Choices for New Jersey campaign.