Global InformationKansas experiment information
The Kansas experiment was a controversial tax policy and agenda by Kansas Governor Sam Brownback in 2012 that had lasting effects in the state of Kansas from May 2012 until June 2017. It drew widespread attention following Kansas Senate Bill Substitute HB 2117, a bill signed into law by Brownback in May 2012.[1][2] It was one of the largest income tax cuts in the state's history.[3] The Kansas experiment has also been called the "Great Kansas Tax Cut Experiment",[4] the "Red-state experiment",[5] "the tax experiment in Kansas",[6] and "one of the cleanest experiments for how tax cuts affect economic growth in the U.S."[7] The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC),[8][9][10][11] supported by supply-side economist Arthur Laffer,[12] and anti-tax leader Grover Norquist.[13] The law cut taxes by US$231 million in its first year, and cuts were projected to total US$934 million annually after six years,[14] by eliminating taxes on business income for the owners of almost 200,000 businesses and cutting individual income tax rates.[14]
Brownback compared his tax policies with those of Ronald Reagan, and described them as "a real live experiment",[15] which would be a "shot of adrenaline into the heart of the Kansas economy",[16] and predicted that by 2020 they would have created an additional 23,000 jobs.[3] By 2017, state revenues had fallen by hundreds of millions of dollars,[17] causing spending on roads, bridges, and education to be slashed.[18][19] With economic growth remaining consistently below average,[4] the Republican Legislature of Kansas voted to roll back the cuts; although Brownback vetoed the repeal, the legislature succeeded in overriding his veto.[20]
Several reasons have been given to explain its failure. Most tax cuts only generate enough new revenue from economic growth under the new lower tax rates to offset 10–30% of the initial tax cut, necessitating spending cuts to avoid deficits.[2]: 1 Kansas's elimination of pass-through income (projected to apply to 200,000 taxpayers, but used by 330,000) created a loophole which allowed many taxpayers to restructure their employment to completely avoid income taxes, thereby additionally decreasing revenue.[21]: 1 [2]: 1 Tax cuts are theorized to generate modest economic growth only in the long term, not the short term.[22]: 1
- ^ "Senate Substitute for HB 2117 by Committee on Taxation – Reduction of income tax rates for individuals and determination of income tax credits; severance tax exemptions; homestead property tax refunds; food sales tax refunds". Retrieved October 29, 2014.
- ^ a b c Hobson, Jeremy; Russell, Dean; Raphelson, Samantha (October 25, 2017). "As Trump Proposes Tax Cuts, Kansas Deals With Aftermath Of Experiment". NPR. Retrieved November 20, 2018.
- ^ a b "Kansas small-business owners say elimination of income tax is a big help". The Wichita Eagle. May 24, 2012. Archived from the original on December 30, 2013. Retrieved October 29, 2014.
- ^ a b Gleckman, Howard (June 7, 2017). "The Great Kansas Tax Cut Experiment Crashes And Burns". Forbes. Retrieved November 20, 2018.
- ^ Cite error: The named reference
NPRwas invoked but never defined (see the help page). - ^ Shorman, Jonathan (July 26, 2017). "The Brownback Legacy: Tax cut push led to sharp backlash". Wichita Eagle. Retrieved November 25, 2018.
- ^ Gale, William G. (July 11, 2017). "The Kansas tax cut experiment". Brookings Institution. Retrieved November 20, 2018.
- ^ Rothschild, Scott (December 17, 2013). "Brownback says perception of ALEC influence is 'overblown'". Lawrence Journal-World.
- ^ Pilkington, Ed (November 20, 2013). "Obamacare faces new threat at state level from corporate interest group Alec". The Guardian.
- ^ Brownback, Sam (May 28, 2014). "A Midwest Renaissance Rooted in the Reagan Formula". The Wall Street Journal. Archived from the original on April 21, 2018. Retrieved December 26, 2021.
- ^ Cite error: The named reference
kcwas invoked but never defined (see the help page). - ^ Cite error: The named reference
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norquistwas invoked but never defined (see the help page). - ^ a b "Brownback Signs Tax Cuts Law In Statehouse Ceremony". KAKE News. Archived from the original on October 29, 2014. Retrieved October 29, 2014.
- ^ Cite error: The named reference
ljworld.experimentwas invoked but never defined (see the help page). - ^ "What Congressional Tax Cutters Can Learn From Kansas". Tax Policy Center. November 29, 2017.
- ^ Casselman, Ben; Koerth-Baker, Maggie; Barry-Jester, Anna Maria; Cheng, Michelle (June 9, 2017). "The Kansas Experiment Is Bad News For Trump's Tax Cuts". FiveThirtyEight. FiveThirtyEight. Retrieved October 4, 2017.
- ^ "Kansas Legislature approves budget deal, after lawmakers deliver blistering critiques of state finances," Archived October 4, 2017, at the Wayback Machine May 2, 2016, Topeka Capital-Journal
- ^ "Kansas Republicans Sour on Their Tax-Cut Experiment" February 24, 2017, The Atlantic
- ^ Berman, Russell (June 7, 2017). "The Death of Kansas's Conservative Experiment". The Atlantic. Retrieved June 7, 2017.
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