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homersapien

Kansas Republicans Sour on Their Tax-Cut Experiment

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Trickle down economics, the theory that seems to outlive actual experience....

 

The state legislature nearly reversed Governor Sam Brownback’s signature policy after a voter rebellion. His economic legacy, one GOP lawmaker says, “is going down in flames.”

It was only two months ago that Governor Sam Brownback was offering up the steep tax cuts he enacted in Kansas as a model for President Trump to follow. Yet by the time Republicans in Congress get around to tax reform, Brownback’s fiscal plan could be history—and it’ll be his own party that kills it.

The GOP-controlled legislature in Kansas nearly reversed the conservative governor’s tax cuts on Tuesday, as a coalition of Democrats and newly-elected centrist Republicans came within a few votes of overriding Brownback’s veto of legislation to raise income-tax rates and eliminate an exemption for small businesses that blew an enormous hole in the state’s budget. Brownback’s tax cuts survive for now, but lawmakers and political observers view the surprising votes in the state House and Senate as a strong sign that the five-year-old policy will be substantially erased in a final budget deal this spring. Kansas legislators must close a $346 million deficit by June, and years of borrowing and quick fixes have left them with few remaining options aside from tax hikes or deep spending cuts to education that could be challenged in court. The tax bill would have raised revenues by more than $1 billion over two years.

The Brownback blowback has been a long time coming. Though he won reelection in 2014, the governor has presided over one budget mess after another since then, and all but his staunchest conservative allies have blamed the crisis on reductions in personal tax rates and a provision that exempted 330,000 owners of small businesses from paying income taxes. Brownback has resisted efforts to undo the policies, preferring instead to raise taxes on tobacco, fuel, and other consumer goods. His relationship with Republicans in the legislature deteriorated, and in primary and general elections last year, a wave of Democrats and centrist Republicans defeated many of the conservatives who had stood by him....

Read the rest at:

 https://www.theatlantic.com/politics/archive/2017/02/the-republican-blowback-against-sam-brownback-kansas/517641/

 

Edited by homersapien

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I am a proponent of Tax cuts but I also believe that they need to be well thought out as I also believe in balanced budgets. Small business owners probably needed a tax break in Kansas but if they were making a profit they also needed to pay some taxes to have 330,000 not paying taxes was a recipe for disaster. What is sad is Brownbeck's reckless cutting of taxes with no thought to balancing the budget will give tax and spend types ammunition for their policies. We have seen states and local communities get in trouble with both extremes cutting without thought to consequences and spending without thought to consequences what that has proven is bad planning doesn't work.

I am an economic conservative I believe in limited government but I am a realist and there are some areas only government can deal with national defense, roads and various types of Infrastructure. We need to balance our budgets and meet our needs in as an efficient manner as possible. I am usually against raising taxes but when the need is there we have to raise taxes sometimes. We also need to find ways to stop government bloat and lower taxes when we can.

Everyday people both those with liberal bents and those with conservative bents realize that the infrastructure in this country is not where it should be. We have bridges and roads falling apart, Water and sewage systems that need upgrades, Gas lines under our homes and businesses that are getting old and need to be repaired or replaced, no national electric grid to help us with energy conservation and local emergencies, etc. The longer we wait the more expensive it will become to fix these issues. As cars have become more fuel efficient they are driving more miles but paying less to repair the roads and bridges they use because the taxes on gasoline have not increased to take into account fuel efficiency. I hate to say it but we must raise taxes there. As Electric cars hit the roads we must find a way to charge them to help rebuild the roads since they are not paying gas taxes.  

Water and sewage bills might need additional fees same with Gas bills do I want these fees no but the other options are do nothing and it gets worse and more expensive or borrow more money fix it and saddle our kids and grand kids with the bill.

If you use it you have to pay for it. Before anybody says that doing that will hit the poor the hardest we can find ways to make accommodations on those fees for some.

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4 hours ago, homersapien said:

Trickle down economics, the theory that seems to outlive actual experience....

 

The state legislature nearly reversed Governor Sam Brownback’s signature policy after a voter rebellion. His economic legacy, one GOP lawmaker says, “is going down in flames.”

It was only two months ago that Governor Sam Brownback was offering up the steep tax cuts he enacted in Kansas as a model for President Trump to follow. Yet by the time Republicans in Congress get around to tax reform, Brownback’s fiscal plan could be history—and it’ll be his own party that kills it.

The GOP-controlled legislature in Kansas nearly reversed the conservative governor’s tax cuts on Tuesday, as a coalition of Democrats and newly-elected centrist Republicans came within a few votes of overriding Brownback’s veto of legislation to raise income-tax rates and eliminate an exemption for small businesses that blew an enormous hole in the state’s budget. Brownback’s tax cuts survive for now, but lawmakers and political observers view the surprising votes in the state House and Senate as a strong sign that the five-year-old policy will be substantially erased in a final budget deal this spring. Kansas legislators must close a $346 million deficit by June, and years of borrowing and quick fixes have left them with few remaining options aside from tax hikes or deep spending cuts to education that could be challenged in court. The tax bill would have raised revenues by more than $1 billion over two years.

The Brownback blowback has been a long time coming. Though he won reelection in 2014, the governor has presided over one budget mess after another since then, and all but his staunchest conservative allies have blamed the crisis on reductions in personal tax rates and a provision that exempted 330,000 owners of small businesses from paying income taxes. Brownback has resisted efforts to undo the policies, preferring instead to raise taxes on tobacco, fuel, and other consumer goods. His relationship with Republicans in the legislature deteriorated, and in primary and general elections last year, a wave of Democrats and centrist Republicans defeated many of the conservatives who had stood by him....

Read the rest at:

 https://www.theatlantic.com/politics/archive/2017/02/the-republican-blowback-against-sam-brownback-kansas/517641/

 

If trickle down economics doesn't work, then what type of economics DOES work? Instead of giving incentives to businesses to create jobs, should the government just give more money to poor people so they can spend it and help the economy? Or is the answer for the government to create all of the jobs?

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I've said before, both extremes of on taxes are wrong.  There is a point at which taxes create a drag on the economy and reduce productivity and investment and drive away industry and people.  There is also a point at which taxes are so low that government cannot function properly, can't meet reasonable obligations, and so on.  There's a sweet spot for taxes where it balances all these concerns and gives you a responsive government with good services, well funded schools and so on while having an environment that's conducive to business growth and people wanting to live there.

The problem comes when people follow ideology that swings to either side too far and ignore reality on the ground.  

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I've said it before, I'll say it again, the Clinton tax levels of the 90s created just about the fairest economy we've ever had - while balancing the budget.  We know what works ... or should know.

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On 2/27/2015 at 3:16 PM, Bigbens42 said:

On the opposite end of the spectrum, let's see how Sam Brownback is doing in Kansas.

Brownback_630x700.jpg

 

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2 hours ago, Grumps said:

If trickle down economics doesn't work, then what type of economics DOES work? Instead of giving incentives to businesses to create jobs, should the government just give more money to poor people so they can spend it and help the economy? Or is the answer for the government to create all of the jobs?

If you are going to interject money into the economy -  whether it be by direct spending or by cutting taxes - it should be done so the benefits are directed to the people who are most likely to use it stimulate the economy.

That ain't the rich. 

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2 hours ago, TitanTiger said:

I've said before, both extremes of on taxes are wrong.  There is a point at which taxes create a drag on the economy and reduce productivity and investment and drive away industry and people.  There is also a point at which taxes are so low that government cannot function properly, can't meet reasonable obligations, and so on.  There's a sweet spot for taxes where it balances all these concerns and gives you a responsive government with good services, well funded schools and so on while having an environment that's conducive to business growth and people wanting to live there.

The problem comes when people follow ideology that swings to either side too far and ignore reality on the ground.  

That describes the Republican anti-tax ideology in my state of SC perfectly.

Our roads are falling apart and they are unwilling to even consider an increase in gas tax, even though we have one of the lowest rates in the country.  It's gotten so bad that CEO's are lobbying the state legislature to raise gas taxes.

http://fixscroads.com/sonoco-ceo-calls-for-gas-tax-increase-to-fix-sc-roads/

https://www.scchamber.net/media-center/article/pressure-mounting-sc-senate-fix-our-roads

 

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15 hours ago, homersapien said:

That describes the Republican anti-tax ideology in my state of SC perfectly.

Our roads are falling apart and they are unwilling to even consider an increase in gas tax, even though we have one of the lowest rates in the country.  It's gotten so bad that CEO's are lobbying the state legislature to raise gas taxes.

http://fixscroads.com/sonoco-ceo-calls-for-gas-tax-increase-to-fix-sc-roads/

https://www.scchamber.net/media-center/article/pressure-mounting-sc-senate-fix-our-roads

 

It is at least as bad in Alabama. Here, the republican leadership knows that they need immediate revenue. They refuse to consider more taxes because they figure that passing a tax increase will keep them from getting re-elected. So they create loopholes so that other entities can assess fees to raise revenue that might go to entities unrelated to the fee. One republican state legislator said that it has gotten so bad that some agencies cannot even keep up with where their funding comes from because it comes so many different places. He feels that the legislature has abdicated its responsibility to govern. I can find examples if anyone finds it remotely interesting.

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19 hours ago, Grumps said:

If trickle down economics doesn't work, then what type of economics DOES work? Instead of giving incentives to businesses to create jobs, should the government just give more money to poor people so they can spend it and help the economy? Or is the answer for the government to create all of the jobs?

This is a dynamic world.  First, you have to realize that the same solution is not the answer to all problems.  You have to understand the balancing of production and consumption. Second, you have to understand the basic concept of diminishing margin of returns.  Just because a little is good, does not mean more is necessarily better.

Ultimately, we should be rewarding REAL investment.  That is the purchase of capital equipment.  That typically translates to growth and jobs.  The capital gains rate is a joke. Sitting back and collecting dividends from a stock portfolio does nothing for the economy.  

IMO, this problem will grow as, we humans become increasingly productive by inputting more technology rather than labor.  Paradigms are, and will be, shifting.  We will not be able to rely on the ideologies of the past.  At some point, we will have to create solutions that recognize the unique circumstances of the present and the future.

Clinging to old, inane ideologies that represent more understanding of the past than the future will only serve as an obstacle to a better future for everyone.

We need to understand the significance of the relative values of capital and labor, the balancing of production and consumption, the importance of education but mostly, we must adopt an attitude that ALL workers are significant and deserve respect and a living wage.

It is not the responsibility of our government to make sure that capitalism, the capitalist, thrive.  The responsibility of our government is to promote the general welfare of all members of our society.

Thanks to W. Bush, Brownback, and Jindal, we should all now know that trickle down economics is ideological economics and therefore, is ridiculous and inane.  There is value in understanding of all economic theories.  Devout, unconditional faith in any single theory is an exercise in either deception or, futility.

 

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On ‎2‎/‎25‎/‎2017 at 9:16 AM, icanthearyou said:

This is a dynamic world.  First, you have to realize that the same solution is not the answer to all problems.  You have to understand the balancing of production and consumption. Second, you have to understand the basic concept of diminishing margin of returns.  Just because a little is good, does not mean more is necessarily better.

Ultimately, we should be rewarding REAL investment.  That is the purchase of capital equipment.  That typically translates to growth and jobs.  The capital gains rate is a joke. Sitting back and collecting dividends from a stock portfolio does nothing for the economy.  

IMO, this problem will grow as, we humans become increasingly productive by inputting more technology rather than labor.  Paradigms are, and will be, shifting.  We will not be able to rely on the ideologies of the past.  At some point, we will have to create solutions that recognize the unique circumstances of the present and the future.

Clinging to old, inane ideologies that represent more understanding of the past than the future will only serve as an obstacle to a better future for everyone.

We need to understand the significance of the relative values of capital and labor, the balancing of production and consumption, the importance of education but mostly, we must adopt an attitude that ALL workers are significant and deserve respect and a living wage.

It is not the responsibility of our government to make sure that capitalism, the capitalist, thrive.  The responsibility of our government is to promote the general welfare of all members of our society.

Thanks to W. Bush, Brownback, and Jindal, we should all now know that trickle down economics is ideological economics and therefore, is ridiculous and inane.  There is value in understanding of all economic theories.  Devout, unconditional faith in any single theory is an exercise in either deception or, futility.

 

I appreciate your response and agree with all of it and did even before your lecture. I don't think (nor does anyone else IMO) think that the economy is a simple thing to understand or manipulate. So much of the disagreement has to do with how we are defining terms. What is "trickle down economics"? How does the gov't, as you suggest, reward REAL investment? Is it by incentivizing businesses to purchase capital equipment? Isn't that a form of trickle down economics? Just as me saying "trickle down economics is great" is ridiculous and inane without explaining it, you saying that "trickle down economics is ridiculous and inane" is equally ridiculous. Some "trickle down economics" is REQUIRED. I am quite sure that the Clinton tax levels (as RuninRed said) and the economy that those levels created could serve to educate us now. I am also quite sure that the situation we are in now is different and always changing (as you just said) and that 1990's solutions may not apply now. You are completely correct that "devout, unconditional faith in any single theory is an exercise in wither deception or futility" but don't forget that devout, unconditional rejection in any single theory is ALSO an exercise of either deception or futility.

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2 minutes ago, Grumps said:

I appreciate your response and agree with all of it and did even before your lecture. I don't think (nor does anyone else IMO) think that the economy is a simple thing to understand or manipulate. So much of the disagreement has to do with how we are defining terms. What is "trickle down economics"? How does the gov't, as you suggest, reward REAL investment? Is it by incentivizing businesses to purchase capital equipment? Isn't that a form of trickle down economics? Just as me saying "trickle down economics is great" is ridiculous and inane without explaining it, you saying that "trickle down economics is ridiculous and inane" is equally ridiculous. Some "trickle down economics" is REQUIRED. I am quite sure that the Clinton tax levels (as RuninRed said) and the economy that those levels created could serve to educate us now. I am also quite sure that the situation we are in now is different and always changing (as you just said) and that 1990's solutions may not apply now. You are completely correct that "devout, unconditional faith in any single theory is an exercise in wither deception or futility" but don't forget that devout, unconditional rejection in any single theory is ALSO an exercise of either deception or futility.

You obviously read my post with an emotional bias.  Therefore, you didn't really read my post.  The points you are attempting to make were addressed.

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ICHY, I will add this in a separate reply so as not to confuse the two issues.

Your reply of "we must adopt an attitude that ALL workers are significant and deserve respect and a living wage" is somewhat vague in my opinion. Certainly, all workers are significant in that as humans and as citizens they have rights and should be valued. But, regarding the economy, ALL workers are not significant. There are MANY workers who could disappear suddenly from the planet and their employers would hardly know it. Sure, they pay some taxes, but otherwise do no good at all for society or the economy.

The issue that ALL workers deserve a living wage s laughable with defining what a "worker" is and what a "living wage" is. I believe that it is far more honest and fair and respectful for society as a whole to pay workers a fair wage. If that wage is not a living wage then give them charity, if possible to make up the difference. Falsely elevating the value of job does more harm than good.

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8 minutes ago, icanthearyou said:

You obviously read my post with an emotional bias.  Therefore, you didn't really read my post.  The points you are attempting to make were addressed.

Okay. Thanks anyway. I will try to read it again later when I am less emotional.

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Meanwhile, any one care to guess what's going in California ...

Quote

Golden State voters elected a Democratic governor, Jerry Brown, and elected huge Democratic majorities. The state’s budget was in shambles when Brown took over from Republican Arnold Schwarzenegger, with a deficit of $25 billion in fiscal year 2011-12.

What did Democrats do?

They raised taxes on the wealthiest households, and their plan brought the budget into balance, paid down huge debts from past deficits, and has even run surpluses the last couple of years. At the same time, California’s economic growth rate has been very strong. In the most recent year for which we have data, it was more than double the average for the country, and was in fact tied for the highest rate with Oregon—another state with a Democratic governor and Democratic majorities in both houses of the state legislature. California may have to make some adjustments going forward, but overall the liberal tax and budget policies implemented a few years ago have been a real success.

Those pesky facts, they'll set the story straight, every time.

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On 2/26/2017 at 11:37 AM, Grumps said:

ICHY, I will add this in a separate reply so as not to confuse the two issues.

Your reply of "we must adopt an attitude that ALL workers are significant and deserve respect and a living wage" is somewhat vague in my opinion. Certainly, all workers are significant in that as humans and as citizens they have rights and should be valued. But, regarding the economy, ALL workers are not significant. There are MANY workers who could disappear suddenly from the planet and their employers would hardly know it. Sure, they pay some taxes, but otherwise do no good at all for society or the economy.

The issue that ALL workers deserve a living wage s laughable with defining what a "worker" is and what a "living wage" is. I believe that it is far more honest and fair and respectful for society as a whole to pay workers a fair wage. If that wage is not a living wage then give them charity, if possible to make up the difference. Falsely elevating the value of job does more harm than good.

You have a point.  Perhaps I should have given more detail.

In the global economy, we can not simply, artificially raise wages, only in our country.  We have to raise wages on the global level.  We have to create consumers capable of more than just subsistence consumption.  Production demands consumption and, vice-versa.  Balancing leads to growth.  Which is why, a one-sided economic theory is inane.

We need to stop the widening gap between the relative values of labor and capital (on a global scale).  Exploiting cheap labor promotes limited, narrow economic opportunity and interests.  

I disagree with your assertion that all workers do not deserve a living wage, a wage at least in line with what is required for shelter, food, medical care, basic needs.  If we have to supplement wages with welfare, who are we really benefiting?  Ultimately, we are talking about human beings, not disposable inputs to production.  Ultimately, better societies will create more productive, safer, higher quality of life, environments.  Perhaps, if we balance the interests of society and capital, we can achieve much more than simply focusing on one or, the other?

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