Kansas and the Laffer Curve...

...may cost Kansas Gov. Sam Brownback his job.

Gov. Sam Brownback and his celebrity tax policy consultant, Arthur Laffer, said Tuesday that the income tax cuts Kansas lawmakers approved earlier this year will drive growth and make Kansas more competitive with surrounding states.

Laffer told more than 200 people at a small-business forum at Johnson County Community College that there is a war among states over tax policy and that nowhere is that revolution more powerful than in Kansas. He said Kansas’ tax cuts and political shifts will produce “enormous prosperity” for the state.

“It’s not a left-wing, right-wing thing,” Laffer said. “It’s economics.”

Laffer said his studies show states with lower tax rates outperform high-tax states — a notion several other tax policy analysts say is misleading.
http://www.kansas.com/news/article1097282.html

The CATO institute gave Brownback an A on fiscal policy:
http://www.cato.org/sites/cato.org/files/pubs/pdf/GRC2012.pdf

The American's for Tax Reform said it was a model for the nation and the story of the decade:
http://dailycaller.com/2014/03/03/the-next-tax-reform-model-for-the-nation-comes-from-kansas/

What were the results 2 years later?

338 million dollar state deficit in 2014, cutbacks in services for the people in Kansas that need it most, and huge hits to the education system leaving Kansas even farther behind.

The Governor's office is in a war with the Kansas state court over education spending - which the court has ordered twice to be increased to meet State constitution guidelines:
http://www.kansas.com/news/article1106342.html

Job growth has lagged behind the nation since the tax reforms:
http://www.washingtonpost.com/blogs...in-kansas-have-cost-the-state-money-and-jobs/

Their credit has been downgraded:
http://www.reuters.com/article/2014/08/06/usa-kansas-ratings-idUSL2N0QC1MO20140806

By two agencies:
http://www.kansascity.com/news/government-politics/article348210/Moody’s-downgrades-Kansas’-credit-rating-citing-sluggish-recovery-and-risky-tax-plan.html

And a Red state that has been the most republican in the nation for the last 50 years in open revolt against a GOP governor.

More than 100 current and former Republican officials have thrown their support behind a Democratic candidate for governor:
http://www.washingtonpost.com/blogs...orse-democrat-against-kansas-gov-brownback-r/

And Brownback is amazingly either tied or losing in every major poll in the reddest of red states:

http://www.publicpolicypolling.com/...xtremely-unpopular-trails-for-reelection.html

http://www.washingtonpost.com/polit...92d86c-1420-11e4-8936-26932bcfd6ed_story.html

Now its only 2 years in since the drastic cutbacks, 4 years into the governor's term where he's started imposing tea party policies. But there's a very good chance that he won't get to see the end of his experiment because those years have been disastrous to the state of Kansas.

Kinda like :arizona:

Shocking.




But I seriously wonder why you bother. Market Fundies don't care about economcs or facts. For them it all about KNOWING the THRUTH.

You used a blog post, your whole entire post can be ignored and called an opinion, right @garamet, @gul ? That's how it works right?

And for libtards it's all about perpetuating the welfare state to ensure neverending dependency on government handouts. When is the last time you heard any Democrat talk about welfare as a short-term solution? They want the poor to suck from the government tit for the rest of their lives. Face it, the Dems are the Vorta, food stamps are the k-white.

As for school funding, continuing to shovel money into failed public school systems is madness. The public schools main mission these days has nothing to do with education, but everything to do with social engineering based on leftist ideology and the suppression of free speech for any conservative student.

And I don't place much stock in the complaints of corrupt local politicos who wallets are getting lighter because the governor's office has tightened the pursestrings.

"It’s not a left-wing, right-wing thing,” Laffer said. “It’s economics.”

Yeah, blog posts all of them. And not even with any standing in the blogosphere -- why, Reuters, the Washington Post, and the CATO Institute haven't even responded to the Ice Bucket Challenge!

Ok, buddy.

Two things I noticed that is telling. The first is the WP article which brings out the old Koch Brothers that Harry Reid spends every day spouting.


The second thing that popped out is the fact that out of the last nine governors, five were democrats. What that tells me is that Kansas is in a constant state of flux. The people there can't decide whether they want big government or not. They want low taxes and small government, but don't cut the public schools or take away my welfare. It's the same thing all across the nation. We want all of these programs, but don't raise my taxes to do so. So, instead we have massive debt and then people bitch about the debt being too high. Let's face it, American voters are stupid. Then the taxes are lowered, but jobs aren't rolling in fast enough so people presume that lower taxes weren't the answer. Guess what? Texas has been doing it for years and they are doing pretty good. While two years should be enough to show improvement, people still believe the Liar in Chief who says the economy is just peachy. So people think the economy should be better everywhere, but it's not and it won't be for a long time unless and until government stays out of it. Then people blame the Governor for the economy. Nobody ever stops to think, " Hey maybe the economy is bad because I LIVE IN FUCKING KANSAS!!" In conclusion, there are several factors at play here, especially in an election year. The tax policy has little to do with this.

Tax policy has little to do with tax receipts?

Wow, you're just bathing in the Kool-Aid aren't you? Fucking Fundies.

I've said before that the Laffer curve is a guide, not gospel - it's just one of the variables that get plugged into what makes an economy tick.

If you've two, otherwise equal, areas, then yes, the one with lower taxes will prosper over the other.

On the other hand, if one is utopia and the other dystopia, then the latter could be so off the graph it has negative taxes and it's not going to attract anyone away from the former. At least not for long.

Reality is between those extremes. Nothing wrong with using the Curve, absolutely everything wrong with slavish relying on it.

So, yes, Laffer is a cocktard in this case.

The one with zero taxes will prosper over the one with moderate taxes? I think not.

Depends on how the taxes are collected and what the taxes are spent on, no?

What amuses me is that all the lefties who spend their days screaming about the Koch brothers suddenly have nothing to say when you bring up George Soros and his little activities.

Hence the 'otherwise equal' bit. That isn't going to be achievable with zero taxes without having a golden egg laying goose on the books.

If you've two spots, both offering you exactly what you want, and in an area that satisfies your worldviews, but one means you have more take home pay, who are you going to pick?

Anyone who says "the higher tax one" is the exact kind of person who shouldn't be let anywhere near credit companies lest they think the gazillion APR card is a dandy good deal.

If "otherwise equal" implicitly includes "raises sufficient taxes to pay for stuff" then your statement is surely meaningless.

It is correct that setting taxes too high has ill-effects. But so does setting them too low. There is a happy medium, and where that rests depends on what sort of society you want.

Congratulations, you've just defined the Laffer Curve.

Not all, it has quite a bit of meaning, including how the economies functions and perform.

If two places are equitable apart from tax levels, that implies a measure of higher waste in the one with the higher levels.

Let 'em go. The rest of us are tired of subsidizing 'em.

You might want to explain it then to Laffer. He was the tax policy advisor that was fundamental in creation of Kansas tax rates, and said the benefits would be extensive. The opposite happened.

Though I suppose its not an unexpected result. Laffer didn't invent the curve. Its at least 600 years old. See Ibn Khaldun. And he differs majorly with most economists at where the maximum tax vs receipt valuation is. The CBO says even a 10% reduction will reduce taxable receipts far beyond any gain.

The major proponnent of taxable receipt elasticity against potential valuation in the 20th century? It was a guy named John Manynard Keynes.

That's really the whole gimmick. The mere definition of the Laffer curve says no more than that, and everyone who reads that definition immediately agrees. But then it seems to also imply that what is defined as "at least one non-zero maximum" is precisely one, and that it should be somewhere around the middle of a hyperbola, and that it is predictable, and should be predicted by looking for the middle of previous values. None of which Laffer has any good evidence for, but it's just sort of implied by the more general definition because it would be the most simple way to set that definition into practice. Only not really, because that takes a whole bunch of additional assumptions, and they aren't true.

That's an interesting idea, but (a) it isn't part of what the Laffer curve is intended to show, and (b) it shares with the Laffer curve that it hides the interesting questions behind some obvious-sounding generalities: What you're describing is not strictly possible -- if everything except the tax rates is equal, there can be no higher degree of waste, because you've just defined that everything, including of course levels of waste, is equal. So in fact, several things have to be different, and we need to look at them one by one and in detail; and when you understand why more money is being spent rather than claiming that there could be no reason since everything was supposedly equal, what seemed to be waste might turn out to be necessity, and then we're off to the ball game, and the original use of the Laffer curve becomes meaningless.

I think you went beyond the Laffer Curve there right into the Laffer Moebius Symbol.

Yeah. As I've said several times, the sweet spot on the Laffer Curve is not a fixed point, it's a moving target that depends on a lot of nitnoid factors.

Oh, and

http://wordforge.net/index.php?threads/forbes-and-data-art-laffer-is-wrong-consistantly.91572/

I expect a certain degree of understanding that there are underlying reasons for the tax difference (it could be as simple as Country A likes all its representatives to have solid gold limousines, whilst Country B expects them to cycle on their own bikes, or as complex as the bureaucratic structures) in much the same way if I waggle an X Ray result at someone I expect they know things are different densities without the whys and wherefores. Otherwise it all becomes "The Spanish Inquisition is known for n things", followed by trotting out n+1 things.

And I wasn't displaying what it shows, but rather what a genuine use of it can be, why it is massively limited and why it isn't something to base policy on in isolation.

Texas isn't Kansas.

So the argument is "we just haven't let people hit rock bottom yet, give us a couple more years and they'll pull themselves up by their bootstraps"?

I can see how this could apply, since there's always a period of adjustment. It's just difficult to let it happen.

I've noticed the lefties have amped up the "Koch Bros" rhetoric as of late. Never have understood the whole "let's attack our opponents donors" bit as I've never seen that strategy work. It's hard enough getting voters to care about the candidates what makes anyone think they'll remember or care about the donors?