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In 2013, Kansas Governor Sam Brownback signed two bills into law eliminating income taxes for small business owners and cutting individual’s income tax rates. These bills, based on the Laffer theory, had the backing of an ideal economic theory.
Until the imperfect nature of reality disrupted them.
Yet, Travis Brown, the co-founder of Sinquefield-funded Pelopidas, LLC, came on Mike Kelly’s KMOX show to talk about the tax debacle in Kansas among other economic policies.
Is the no income tax experiment in Kansas failing?
It’s working and it will work well over the long haul. You’re looking at a statesmen decision to change the mode in which we fund our public services. There’s only one reason you do it and it’s to get out of the way of production earnings so when you lower the price of work, we can expect more work.
Rather than taking the full leap, in hindsight, should Governor Brownback have taken baby steps towards his ultimate goal of a no-tax state?
Well, his ultimate goal is not yet realized. Even he would say he’s compromised in order to get a handle on the state budget. He will right size his ship. Politicians that go through contractions in state spending or adjustment to any mode of taxation never enjoy that experience.
When callers had a chance to ask him questions, they weren’t too pleased about his take on the Kansas economy.
Caller: The Kansas thing has been a complete disaster. Now they are talking long term, and that isn’t how it was sold to the people, as an immediate boost. Session just had to go overtime at a cost of $4300 a day to try to balance the budget. Guess how they did it? Sales tax and 50 cents tax on cigarettes. Once again, the Republicans resorted to a regressive tax.
Brown: The session didn’t go as planned, they had to make adjustments to state spending. We know that taxing production on earnings in the most distortionary. Consumption taxes, relatively speaking, work better. It’s going to take a little bit longer because the state economy works with the federal economy, and the national economy isn’t doing too well.
The failing tax policies clearly illustrate how dangerous it is for Kansas to continue on this same path, and yet, Brown remains adamant that staying the course is what’s best for a state he doesn’t even live in. While economic indicators are positive numbers, they pale in comparison to neighboring states, including Missouri.
Brown’s coded anti-poor comments are poorly disguised. When discussing the most “effect” type of tax, he argues that proportional income taxation is an inferior way to fund the government than an equal application of the sales tax and cigarette tax. What he really wants to explore is putting the burden of funding on low-income Kansans. Everyone purchases goods and services, but when there is an increase in the sales tax, it disproportionally impacts low-income families.
It’s incredibly patronizing and callous of Travis Brown and Rex Sinquefield to perpetuate destructive tax policies especially at the expense of hard working families.