Gov. Brownback backs down and calls for tax increases – Are the Republicans in Congress Listening?

(Promoted by Colorado Pols)

Gov. Sam Brownback of Kansas.

Gov. Sam Brownback of Kansas.

Wow, after years of reckless tax cuts covered over by the now completely discredited notion, known as the Laffer Curve, that reducing taxes will automatically generate increased economic activity and correspondingly the government bank account will overflow with new revenue, Gov. Brownback has reversed course and yesterday called for Kansas to increase taxes, including a 79 cent per pack increase in the cigarette tax, raising the tax on other tobacco products from 10% to 25%. The tax on beer, wine and liquor would jump from 8% to 12%. The intent is to close, in part, the looming $710 million deficit over the remainder of this fiscal year, which ends on June 30th, and the next fiscal year. However, even these tax increases are only expected to raise $394 million. To make-up the difference, he intends to slow down the pending income tax cuts but remains committed to his goal of eliminating the income tax. In his state-of-the-state address Thursday, he attempted to posture his tax increases as taxes on consumption (which is now apparently OK) as opposed to taxing productivity; but the bottom line remains the same.His experiment has failed, completely. The Laffer Curve doesn't work.

President Reagan tried it in 1981 with a 25% across the board reduction in federal corporate and personal income taxes and the federal deficit exploded. 

Just over a decade ago, George W. Bush was inaugurated President and inherited an $800 billion annual surplus. He decided to drastically cut taxes making the same assumption that Reagan had and the one Brownback made four years ago that huge tax cuts would drastically stimulate economic activity and generate even more tax revenues than the government collected before the tax cuts. What happened? The annual deficit exploded and the promise of increased tax revenues turned out to be a mirage.

Besides Brownback's failed experiment what else has been going on in states controlled by Republican governors and legislatures? Lets look at the Republican nirvana called Wisconsin. Gov. Walker and the Republican dominated state house and senate cut taxes again making the same assumptions as Reagan, W, and Brownback and what happened. Wisconsin is now staring a $2 billion deficit in the face. One Republican leader in the Wisconsin House said he just couldn't understand why state revenues did not increase as expected. Its hard to believe someone who has been paying attention, for even a nano second over the past thirty-four years, could say that. The Laffer Curve is a hoax and a failure.

But, right now, what is happening in Arizona? The new Republican governor of that state, who served a term as state treasurer, has announced that he is going to fix the $500 million deficit this year and the looming $1.1 billion deficit next fiscal year by, you guessed it, cutting taxes because of course that will generate huge revenue increases and the state will have more funds than ever to pay for public programs. He hasn't announced what that is going to do to tuition at U of A or ASU or the other public institutions of higher education or the highway/infrastructure budget but with a state constitution requirement for a balanced budget, we can all guess what is going to happen. In fact, it isn't a guess, it is certain the Arizona state budget can't be balanced unless there are crippling cuts to major state services. But of course iron-clad ideology dictates the sky is green, even though everyone, including Republicans, whether they admit it or not, can see it is blue. The Republican Party and its candidates need to start dealing with facts instead of promoting failed ideas.

The other question is whether the Republicans in Congress are watching and listening. Oh, by the way, calling it "dynamic scoring" won't change the results.

29 Community Comments, Facebook Comments

  1. Andrew Carnegie says:

    Short answer: no.

    • BlueCat says:

      When even the author of the purest experiment in conservative trickle down economic theory ever performed, unfettered by any opposition, has to admit that he couldn't get it to work as advertised but still insists that the theory is sound, you know that conservative Republican economic ideology has become so detached from objective reality that there's no point in expecting this to affect Republican congressional faith in that ideology any more than the past several decades, demonstrating it to be bull, has affected their faith in the past.

      It's really more of a religious belief at this point, not only requiring blind faith but making a sacred virtue of it. Like believing that dinosaur fossils were left by God to test the faith of literal bible believers. Or that every species living today somehow fit on a boat. Or that Obama is a Kenyan born Muslim who supports Islamic extremist terrorists and wants to impose Sharia law. Except when he's being a communist and/or Nazi who wants to put us in reeducation camps after taking away all our guns. I guess managing to believe in unlimited numbers of ridiculous and discredited articles of faith all at once, even when mutually contradictory, is the new Church of Conservative Republicanism's idea of the perfect state of grace. 

    • bullshit! says:

      The Party of No speaks.

  2. Diogenesdemar says:

    Oh sure, next you'll be claiming that Kansas should probably remove spontaneous generation, and the study of vitreous humours, from its AP Biology curriculum??? . . .   

    I'm pissed as hell at Brownback right now, what kind of fucking pussy RINO doesn't ride his unfounded beliefs and an entire state's economy into complete oblivion??  What happened to just giving those grand plans more time to work their Raygunesque magic??

    • Davie says:

      Brownback can sell the tax increases to his base because they only affect "sinful" activities.  The fact that it disproportionately affects the lower middle class as a percentage of income is just a happy bonus as far as Brownback cares.

      • Gilpin Guy says:

        Except when it doesn't cover the spread and the black hole continues to expand.  You know it's going badly when they start to panic and blame Obama for the terrible state of their state.

      • notaskinnycook says:

        You beat me to it, Davie. "sin taxes" will always pass muster with the masses. Even way left-of-center people won't squawk about taxes that will never affect them

  3. mamajama55 says:

    The triumph of ideology over reality. I wonder whether the voters in these states even have a handle on how they are getting screwed by their elected representatives. 

    Have they  just been conditioned by the Fox news machine to blame all of their state's fiscal problems on Obama?

    • Duke Cox says:

      Have they  just been conditioned by the Fox news machine to blame all of their state's fiscal problems on Obama?

      Yes. Obama Derangement Syndrome has reached epidemic level. Every ill facing the world is the direct handiwork of the hated Kenyan Muslim in the White House…oblivious to the fact that the taxes raised by Brownback are taxes that will be paid, primarily, by the working class and the poor The relatively small number of people who are the uber-rich don't spend nearly as much on those consumable items as the rest of us. Next they will set their sights on raising taxes on food.

      Until we start raising taxes on property and wealth, there will be no solution.



      • BlueCat says:

        Only because Dems have been too scared of the righties to counter their message aggressively. Too afraid of being called commies or whatever. The Dem solution to the rightie spin machine is to apologize for being Dems and promise to be more like righties.

    • Republican 36 says:

      Thanks Michael. Great additions to the thread.

      Also, Gov. Brownback has announced he intends to freeze K12 spending in the state budget for the next three years. Translated that means the local school districts will need to increase their taxes by $44 million just to keep even. Everyone can see where this is going. He's going to balance the budget on the backs of local taxes and then proclaim supply side economics worked. What a guy.

      • FrankUnderwood says:

        Or they can simply abolish public schools at the local level, and decree that there be: (a) private schools, (b) home schooling, or (c) "work-study" at McDonald's and Burger King franchises.  School choice!

        • Conserv. Head Banger says:

          Under your scenario, only fundamentalist Christian schools will come under your definition of "private schools."  We gotta get back to those biblical values.

          (yeah, right).   C.H.B.

    • FrankUnderwood says:

      This ranks right after "There are weapons of mass destruction in Iraq" in the Shrub's history of whoppers!  And now his little brother wants to be president!  

    • BlueCat says:

      Priceless. And Chalabi was supposed to be running Iraq for Halliburton as soon as they were finished throwing flower strewn parades for us.

  4. BlueCat says:

    I see AC and modster are avoiding this thread like the plague. Borg still processing?

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