Today’s smartest fiscal policy headline comes from John Tsitrian, who writes of the Kansas Legislature’s repeal of Sam Brownback’s failed tax-cut plan, “The Laffable Curve Flatlines in Kansas.” Tsitrian sees the following lessons for South Dakota lawmakers to take from penitent Kansas:
First, given our propensity for shortfalls in state revenues that occur because of our regressive sales tax/no income tax structure and its dependence on high commodity prices to stimulate our economy, we need to think about reforming our tax system in a way that doesn’t rely on swings in world market prices for grain and livestock. Next, our congressional delegation should be wary of jumping on President Trump’s promise to supercharge the economy with tax cuts for high earners. Last Fall our Congresswoman Kristi Noem breezily and uncritically touted a tax reform package of tax cuts that she claimed would result in a 9.1% growth rate, which showed that she knows neither History, nor Economics, nor what she’s talking about. Given that the Laffer Curve has been a floppola at both the national and state levels, this notion that cutting taxes automatically does all of some good is the kind of snake oil that sells well to rubes but in the end only makes its hucksters some money [John Tsitrian, “The Laffable Curve Flatlines in Kansas. South Dakotans, Take Heed,” The Constant Commoner, 2017.06.08].
Noem, Thune, Rounds, and Trump are relying on the same voodoo economics in their tax cut plan that Kansas Republicans just had to admit did not work. Alas, Kansas had to suffer for five years under the Brownback plan before its Republicans had to stop denying reality. Let’s hope Noem and her fellow Republicans will shake off their slogans and come to their senses sooner and spare us the Brownback wringer.