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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: Lane3 who wrote (4592)	1/3/2017 7:56:32 PM
From: TimF	1 Recommendation Recommended By i-node Read Replies (2) \| Respond to of 364727

Shutting down departments - I have nothing against the idea. Of course if your going to shut down the department it won't make much different if you do the same thing with the same people shuffled off to other departments. You would have to get rid of a lot, perhaps most, of what that department does to really feel the impact. Kansas is doing poorly for a lot of reasons. Also Kansas cut taxes without cutting spending an equivalent amount and so have budget problems. I think some of the Kansas politicians bought in the the political slogan that "tax cuts pay for themselves". They can, but they usually don't esp. in the relatively short run (certain kinds of tax cuts can bring in extra revenue right away and pay for themselves in the very short run, but then often fall short, also tax cuts if done right could pay for themselves in the very long run with extra growth and pay for themselves in the long or very long run, but tax policy and other conditions don't remain the same in the long run). The more accurate idea is that tax cuts normally, maybe almost always, lose less government revenue than a static projection would suggest (and that tax increases gain less). I don't think Kansas was at the far side of the Laffer curve. What I do think is rather silly is the claim that Kansas' economy is struggling because of the tax cuts. The real question isn't is X economy doing well or poorly after passing policy Y, but rather is it doing better or worse then it would have been without passing policy Y. That's a much harder question, so perhaps people do the easy thing and look for their lost keys under the street lamp. If you do just want to look at the end results, and not try to tease out how much is do to the policy changes, there are plenty of cases of solid economic growth after tax cuts. I think the evidence suggests (as does economic theory, and to a large extent common sense), that lower taxes (at least up to some point) are good for the economy. But it also seems that the benefit is often much smaller and the durable part of it much slower, then the proponents of tax cuts often suggest. I can see while its tempting to promote tax cuts (even when starting marginal tax rates are not extremely high) as something that will automatically create a huge amount of extra growth. Those that like tax cuts put forth a more appealing argument to get their policy passed. Those that have potential voters and donors who believe tax cuts are that effective can appeal to the voters or donors which are often the two things many politicians care most about. But making a more extreme claim (we're going to have an economic boom because of tax cuts, so that government coffers will be flush with cash even at the lower rate), sets you up to look like your policy was a failure, even when it was modestly good. Also the timing and size of tax cuts, and proper discipline on spending, all need to be managed right. Not "lets have a big tax cut every time the day ends in y".

To: Lane3 who wrote (4592)	1/6/2017 3:49:00 PM
From: TimF	Read Replies (1) \| Respond to of 364727

ssumner 19. December 2016 at 17:33 Sean, Don’t confuse the “rust belt” (a set of cities between St Louis and Buffalo, including Detroit and Cleveland, with the entire Midwest, which includes lots of more prosperous areas. Foosion, Places like NYC and California can do OK with a high tax and high regulation model, because they are so productive. Lots of firms and even entire industries with monopoly power. Great amenities that the rich are willing to pay for. Upstate New York is competing in a model much closer to perfect competition, with lots of other similar areas of the country. It’s can’t afford to with NY’s high tax high regulation model. Especially with the bad weather and lack of cultural amenities upstate. Indiana’s doing relatively well for a state in the middle of the rust belt. Kansas cut taxes slightly, but South Dakota and Texas have far more pro-business models—so what would attract people to Kansas? Tennessee is doing far better than neighboring Kentucky, as it has no state income tax. BTW, progressives were saying Kansas was a “disaster” in 2014, and were sure that its governor would lose. He was re-elected... themoneyillusion.com

To: Lane3 who wrote (4592)	7/13/2017 11:51:09 AM
From: TimF	1 Recommendation Recommended By i-node Read Replies (2) \| Respond to of 364727

Despite what the media is telling you, tax cuts really do boost economic growth in the states by Jonathan Williams Mar 25, 2017 Ever since enacting tax reform in 2012, Kansas' efforts have received more media attention than any other state-level tax relief effort in recent memory. While the prevailing media narrative is overwhelmingly negative, like a recent Bloomberg View column by Barry Ritholtz, the data from Kansas does not support many of the arguments these critics make. In reality, the Kansas tax relief is far from the abject failure some like to suggest. In fact, recent data suggest there are some very positive trends for hardworking taxpayers in Kansas. Perhaps the most important complexity to keep in mind is the Kansas tax reform plan was never fully implemented as intended. Many political compromises gave us the fiscal policy patchwork that Kansas taxpayers face. Taxes were lowered, but spending was not. Then taxes were raised in a significant way. Some of the tax increases came in the form of broad-based retail sales taxes, while others were discriminatory taxes on consumers of specific products, such as cigarettes. According to Ritholtz, "The results have been disastrous for Kansans" and, "Massive budget shortfalls, huge cuts to basic services such as road maintenance, and slashing of education budgets became annual events." Let's take a MythBusters-style look at these factually-challenged arguments and set the record straight. First, the Kansas economy is not facing a disaster as Ritholtz suggests. Michael Austin, who serves as chief economist at the Kansas Department of Revenue, recently announced that Kansas enjoyed record-high private sector employment in 2016. Additionally, business startups continue to break records since tax reform was enacted in 2012. The 2012 record was broken in 2013, and again in 2014. New business filings set another record in 2016 with 18,147 new domestic business filings. The exemption on pass-through income has been one of the most debated elements of the Kansas tax changes, but also produced strong growth. Employment at pass-through companies grew by just 2.4 percent in the two years prior to tax relief but then jumped by 8.4 percent in the two years following. That 250 percent change in growth rate was far greater than the national average and the 36,135 new pass-through jobs accounted for 82 percent of private sector job gains in those two years. Taxes matter for growth. Dave Trabert, president of the non-partisan Kansas Policy Institute recently analyzed data from the federal Bureau of Economic Analysis and found: "Over the 14 years leading up to 2012, private sector jobs grew by 6.3 percent and that growth rate ranked 41st among the states. But in the three years since income taxes were reduced, Kansas' growth of 4.8 percent was ranked 31st among the states after adding 74,289 more jobs over the period." BEA data is important because unlike the Bureau of Labor Statistics, they count proprietors in their job totals—one of the beneficiaries of the pass-through exemption. Also contrary to Ritholtz, slashing education budgets has not been "an annual event" in Kansas, not even close. The Kansas Department of Education reports per-pupil funding increased from $12,283 in fiscal year 2011 (Brownback's first year) to $13,025 last year. And to the ludicrous claim that "a tax cut of only a few percent" is doubtful to "nudge people to make big new investments or hire workers," one need look only to the substantial bulk of academic literature and some old-fashion common sense that show the opposite. Individuals and businesses make economic decisions at the margin. Supply decisions are seldom all-or-nothing efforts. The tax rates that affect such decisions are the marginal tax rates, which apply to the last or next dollar to be earned from small reductions or small increases in economic activity. Therefore, raising taxes, even by a small margin, shrinks the space that economic actors have in which to act, reducing quantity of resources available for production. Look to states like North Carolina and Tennessee, who both substantially grew economic activity and earned budget surpluses by reducing tax rates at the margin. It is clear advocates for higher taxes and larger government are attempting to use the Kansas experience as a scare tactic with policymakers in other states. If they are successful in distorting the Kansas story, they believe it will stop pro-growth tax cuts in states across the country. The truth behind the implementation and impact of Kansas's 2012 tax reform is too often shrouded in misinformation and half-truths, but for those now enjoying higher growth and lower unemployment, the facts are clear—the pro-growth policies are working. Much of the criticism about Kansas is based on preconception and myth, rather than empirical data and actual trends. Pro-growth tax relief can be trusted to make states more competitive, but they take time to develop and must be offset with appropriate spending reforms. washingtonexaminer.com More than just taking time, the effects are also not always huge, you can't just pass a tax cut and expect a miracle, or even expect a very strong economy when the situation is bad for other reasons.