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Sinquefield: Kansas Budget Woes Have Nothing To Do With Brownback's Failed Tax Cuts

This afternoon, Rex Sinquefield and Art Laffer appeared on St. Louis Public Radio to plug their book, An Inquiry into the Nature and Causes of the Wealth Of States. In the book, Laffer and Sinquefield call for states to eliminate income taxes and implement ALEC's so-called "right-to-work" policies (Sinquefield is a major ALEC donor). Sinquefield has been a major cheerleader of Kansas Governor Sam Brownback's failed tax policies that have left the state with a massive budget deficit, a downgraded credit rating, and job growth that is well behind neighboring states.

But Rex still loves the Brownback tax schemes. Speaking with Don Marsh on St. Louis on the Air today, Sinquefield again defended Brownback's failed tax experiment, claimed the state's enormous budget deficit had nothing to do with the misguided tax cuts—  and that it's all really Obama's fault:

DON MARSH: Rex Sinquefield, I’ll turn to you because I know you’ve written in Forbes magazine and elsewhere endorsing what Sam Brownback has done in Kansas. That apparently has not turned out that well. In fact, they’re talking about making some revisions in what he’s done. 
   
REX SINQUEFIELD: We'll have to see what actually happens. It was an amazing thing they did there to cut taxes the way they did. To cut taxes on business I think was a stroke of genius. Those are the job creators and that’s where they had a tax rate that went from I think 6.5% to 0 on the small and medium businesses. Everyone else had a tax cut but much smaller in proportion. This story is not over. These things don't happen overnight. You have to wait a few years for these effects to kick in. If you’re a businessman, say you have an office of doctors or lawyers or whatever in Kansas City, Missouri and now you learn of this. You say, “this is great, we can increase our income every year by 6% just by moving three blocks.” You can’t do it the next day. You’ve got lease obligations and things like that. But you’ll do it when you can. But these things take time. 
 
MARSH: Well, there’s a $279 million gap in Kansas right now. That’s going to be difficult to make up. 
 
REX: I think that has very little to do with taxes per se and has a lot to do with the misestimation of revenuesArt is the best one to talk about that. He knows a lot about that. Kansas is not alone, nearly all the states make the same mistake.
 
ART LAFFER: Because Obama raised the taxes on unearned income in 2013, a lot of people nationwide accelerated their income out of 2013 and reported in 2012 at lower taxes. So, what they did in states, 40 states, is they took the 2011 number, the 2012 number, and just extrapolated it into 2013. When in fact in 2013 it dipped way down. That misestimate cost Kansas, $300 million in tax revenues. There are a couple of other ones that happened in Kansas that had nothing to do with the tax rate reductions that Sam Brownback and the legislature put in. Another one is the courts requiring they raise the amounts they spend on schools from $3,800 to $4,200. Whether that goes through the Supreme Court we will see. But those have nothing to do with tax rate reductions. 

Sinquefield's new claim that Kansas' massive budget deficit has nothing to do with the massive tax cuts implemented by Brownback is laughable. The state faces a nearly $280 million dollar deficit this year and the tax cuts are projected to cost the state $7 billion by the end of 2019. Even Brownback's budget director has acknowledged that the tax cuts have to be "on the table" to balance the state budget. Sinquefield would do well to take the advice the Kansas City Star's Dave Helling gave Brownback on his new term: be honest that the tax policies have failed to provide the increased revenues that were promised and be serious about scaling them back to balance Kansas' budget.