Voodoo Economics On The Prairie

Voo´doo economics:

n. 1. (Politics) an economic hypothesis, proposed by President Ronald Regan, that large cuts in tax rates would so stimulate the economy that the tax revenue on the increases in business and personal income would offset the anticipated tax revenue losses

I have written several posts about what is going on in Kansas, my old home state. While it has always been a reddish state, it hasn’t always been an irrationally reddish state. But most of the non-nutty Republicans have been chased out of office and replaced by extremists who are engaged in a race to the bottom. One of those extremists is the governor, Sam Brownback.

Not only have Kansas reactionaries further restricted reproductive rights and made it harder to vote, they are on the brink of moving the state back to the 19th century in terms of the size and effectiveness of state government.

Recently a commenter from Kansas wrote to me with the following request:

I…would love for you to do a post over the income tax elimination proposed by the governor from the state of Brownbackistan…I mean Kansas.

He linked to an article in The New York Times, “Kansas’ Governor and G.O.P. Seek to End Income Tax,” which included this:

…lawmakers received a bill to inch the state closer to eliminating income taxes, a centerpiece of a broad legislative vision that many in the Republican Party here hope will serve as a model of conservative governance for other states, if not the nation, to follow.

Kansas a “model of conservative governance“? Well, yes it is. It is a perfect model of what the country would look like if Tea Party conservatives got control of the entire federal government. Let’s begin with the following from the Times article:

This month, the largest tax cut in Kansas history took effect, and most of its Medicaid system was handed over to private insurers. The bill introduced this week would pare taxes further, with the goal of eventually eliminating the state’s individual income tax. Mr. Brownback has already slashed the state’s welfare roll and its work force.

Later in the article we find this about the largest tax cut in Kansas history:

Critics say Mr. Brownback’s tax cut was passed on the backs of low-income Kansans. The bill included the repeal of tax credits for food, rental housing and child care that benefited low-income residents. Because of those repeals, the poorest 20 percent of Kansans will spend an additional 1.3 percent of their incomes, an average of $148 per year, on taxes, according to a report by the Institute on Taxation and Economic Policy. The top 1 percent, meanwhile, will see the share of their income that goes toward taxes drop by 2 percent, or $21,087 per year, the report said.

Let me see. Here’s how Voodoo Economics On The Prairie works: First we cut income taxes on the wealthy, put poor sick children in the hands of profiteers, cut income taxes some more, then eventually eliminate income taxes and kick the poor out the door and fire government employees who aren’t needed because the state isn’t doing anything for anyone except businesses. Got it?

All this is what they are calling in Kansas an “experiment,” you know, sort of like the CIA’s MKUltra project in the 1950s and ’60s. Remember that one? The government conducted experiments with what is politely called “behavioral engineering” but what we all know as mind control.

The subjects of those illegal CIA experiments were, like most of the poor, the sick, and others needing government services in the Kansas experiment, unwitting participants. The idea is to muck with people’s minds and lives and see how it goes. Get it?

Oh, that’s not quite fair. In the Kansas experiment, many of those who will suffer actually voted for the experimenters—Brownback got 63% of the vote in 2010. So, not all of the subjects are unwitting.

In any case, a Wichita Democrat in the state senate said of the Brownbackistan experiment:

It kind of eliminates a large group of Kansans out of that pursuit of happiness. They will still struggle. They’ll pay the highest taxes. They are already working jobs with no benefits or very little benefits.

Pursuit of happiness“? Who says that “a large group of Kansans,” or anyone else for that matter, is entitled to pursue happiness? What’s that you say? Oh yeah, my bad. I forgot:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.

Do you know what follows those words? Do you know what follows the declaration that there is a self-evident and unalienable right to pursue happiness? These:

That to secure these rights, Governments are instituted among Men…

Governments are instituted to secure unalienable rights like the pursuit of happiness. In the Kansas experiment, government is being de-instituted, disestablished, effectively dissolved for many Kansans. And it is being done by people who swear to God that the Founders were close to infallible beings.

The key to that de facto dissolution is taxation. By cutting, or in some cases eliminating, taxes, the government beast can be starved if not to death, at least to the point where it can’t do what it needs to do to make “the pursuit of happiness” real to all people in the 21st century.

And to make matters worse, what taxes remain in effect fall disproportionately on—you guessed it. From The Kansas City Star:

A new study by the Institute on Taxation and Economic Policy shows Kansas and Missouri, like most the nation, skew their tax burdens toward the upper end on the income scale.

Kansas skews more to the rich than Missouri, and more than the nation as a whole.

I would ask that you look closely at the graph below (supplied by the ITEP) because at first you will think your eyes are lying to you:

kansas taxes

If your eyes are working, you can see that the state and local tax burden for the poorest Kansas families is more than two-and-a-half times that of the richest 1% of taxpayers. Oh, but wait. There’s more.

Low wage earners necessarily spend all of their money to live. Thus, this graph shows an even worse burden on them in terms of taxes on spending:

kansas sales tax distribution

Let’s be clear about all this by getting back to the original point from The New York Times story:

…lawmakers received a bill to inch the state closer to eliminating income taxes…

To replace some of the revenue that would be lost by eliminating income taxes, guess what Brownback wants to do? Sorry, I know that was too easy. He wants to make permanent an increase in the sales tax!

The extremists aren’t content with the wealthiest Kansans not shouldering their share of the burden. No, no, no. They want to make things even easier for the moneyed class by eliminating the tax on their high incomes. And according to Voodoo Economics On The Prairie, all of this will, if we’re patient enough, result in rich people and businesses from all over the country flocking to Brownbackistan to create jobs!

Geeze.

Here’s yet another graph to show how eliminating the income tax will skew the tax burden even more in favor of the affluent in Kansas:

income taxes as share of personal income in kansas

You can see that if income taxes are eliminated, the burden will fall even more on those who have less, or, as per the conservative starve-the-beast scheme, government services will have to be cut even further.*

What we have in Kansas, as I have said, is a race to the bottom. And I do mean race. From the Times article:

Kansas’ tax policy has caught the attention of its neighbors. Gov. Dave Heineman of Nebraska, a Republican, has introduced a bill to eliminate a variety of taxes, including ones on individual income and small businesses. Gov. Mary Fallin of Oklahoma, also a Republican, plans to call for modest income tax cuts, and Missouri lawmakers have discussed reforming their tax code.

Anyone but practitioners of voodoo economics can see that if all the states cut their taxes then any potential economic advantage by one state is erased. All that we will have left are tiny and feckless state governments that fail to secure for their citizens what the Founders said was an unalienable right: the pursuit of happiness.

And, of course, tiny and feckless government is really the point of the voodoo we see.

______________________________________

* One of those government services is education. A state district court recently ruled that Brownback and his Republican friends cut education spending in violation of the state’s constitution, which means (if the Kansas Supreme Court upholds the ruling) the state will have to generate close to a half a billion dollars in extra revenue by 2014.  Where will it come from?
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19 Comments

  1. Jane Reaction

     /  February 1, 2013

    In the usual GOP way, Brownback started his cuts among the poor.

    Out-sourcing Medicaid? A stroke of cruelty.

    Like

  2. ansonburlingame

     /  February 2, 2013

    An observation if you will,

    Texas and Florida have no State Income Tax. I have not heard much about grave financial issues in those two states or screams of state sponsored income redistribution therein.

    Oregon has NO sales tax but a huge state and local tax on property and income. My son moved to the Portland area and lived therein for two years. He purposely purchased his home across the Columbia River to live in Wash State (no state income tax) and saved over $35,000 per year in state taxes in doing so. As well Oregon has perpetually been closing schools early year in and year out because it does not have the money to keep them open for a full term, year in and year out.

    We have enough problems in Missouri to solve and attacking your home state is………? But in terms of Missouri, our current State Income tax is around 5%, across the board as far as I know. So tell us, those living in Missouri, how progressive should MO. income tax become and what “top rate” would YOU propose for people living in MO?

    Once you figure out that answer, might you suggest a campaign slogan that would allow Dem lawmakers in MO be able to democratically achieve, again, legislative dominance in this state to achieve your recommended level of state taxation???

    Anson

    Like

    • Anonymous

       /  February 4, 2013

      AB, I would not include Texas in this argument. They had a huge( 27 Billion ) deficit in 2011 that appears to have been turned around only by huge oil profits recently. Not all states have that advantage.

      Kabe

      Like

    • Anson,

      I don’t suppose you find the irony in your little story about Oregon?

      You said,

      Oregon has NO sales tax but a huge state and local tax on property and income.

      Then you said,

      My son moved to the Portland area and lived therein for two years. He purposely purchased his home across the Columbia River to live in Wash State (no state income tax) and saved over $35,000 per year in state taxes in doing so.

      Then you said,

      Oregon has perpetually been closing schools early year in and year out because it does not have the money to keep them open for a full term, year in and year out.

      The points liberals have been making are all right there in your comment, if you could only see.

      Duane

      Like

  3. This is an example of people voting against their own interests. It is going to take some real hurt to wake these people up to the Republican Party’s allegiance to the Koch Brothers, greed among the one percent, and how the GOP (Greedy Old Party) is not looking out for them. If and when these social conservatives realize that the fiscal conservatives are using their anger over social issues to screw them over, maybe they will come to their senses.

    Like

    • Jim,

      Those social conservatives simply have no other party to embrace. Thus many of them have adopted the voice of the moneyed class, which, of course, ultimately runs the GOP. I will never forget my first Joplin Tea Party at which I saw a “Don’t tax the rich” sign, or something like that. Amazing stuff.

      Duane

      Like

  4. ansonburlingame

     /  February 3, 2013

    Jim Hight,

    I suggest you and others herein read Senator Blunt’s column in today’s (Sunday) Globe.

    The GOP has produced many “budgets” over the last four years and gotten “creamed” politically for having done so.

    I long for the day when Dems have to put the money where their big mouths might be and be forced to vote and approve a budget that will be acceptable to the majority of the American people. As well, if and when they ever do so and America falls deeper into an economic pit caused by debt accumulation and unneeded spending, year after year, then only the majority of the American people and their choosen representatives can be held to blame, you among them.

    Think I am “crazy”. Well only check out what is happening about 3000 miles to the East, today.

    Anson

    Like

    • I read Roy Blunt’s article, and it is nothing but a return to the failed policies of George Bush: reduce taxes on the billionaire corporations and the nations one-percent, cut Social Security and Medicare, and put the tax and social burden on the middle-class and poor. As with most Congressional and Senate Republicans, Mr. Blunt will take care of those who own him–K-Street lobbyists, corporate America, and the one percent. The wealthy have had over ten years of reduced taxes, first implemented by George Bush and carried forward by President Obama. Instead of creating jobs in this country, they take them overseas, all at the blessings of Mr. Blunt and his fellow obstructionists (they killed the bill that would have taken away the tax break for moving manufacturing overseas). All he wants is to return to failed policies.

      Like

    • Elaine Hines

       /  February 4, 2013

      About those splendid Republican budgets–

      Source: Forbes
      Annualized growth of federal spending:

      Reagan 1st term: 8.7%
      Reagan 2nd term: 4.9%
      Bush, Sr.: 5.4%
      Clinton 1st term: 3.2%
      Clinton 2nd term: 3.9%
      Bush, Jr. 1st term: 7.3%
      Bush, Jr. 2nd term: 8.1%
      Obama 1st term: 1.4%

      Republicans deny the reality of their governing style with lies, lies, lies that the majority of Republican voters believe and parrot as if it were actual truth. I am amazed.

      These numbers don’t lie.

      Like

  5. ansonburlingame

     /  February 4, 2013

    Jim,

    From reading this blog I know rather clearly what you and other local liberals think about Senator Blunt. Above you only repeated yourself, again and attacked all the previous “failed policies”, etc.

    But that was not the point of my comment.

    I want to SEE and read what YOUR policies really might be, beyond rhetoric. The way to do so is “put the money where your mouth is” in a BUDGET. We MUST spend “this” on “that” and by default, NOT SPEND on things left out or “cut to the bone”. No, a BUDGET DOES not TAX people; it only estimates the tax revenue coming in and then specifies the spending that is proposed, approved and then authorized and actually spent by the Executive Branch.

    YOUR Party has failed to produce a budget for now four years. And every time YOUR Party’s President has recommended one, you have voted it down or simply ignored it.

    Rant and rave all you like against Blunt, etc. But then DO SOMETHING in terms of planning for, approving and authorizing spending on all your “favorite things”. And of course many of those “things” I will oppose. But so what. I and my party are now in the minority.

    You and your party are now “in charge”. I accept that from the elections as the will of the people. But now that you are “in charge”, well TAKE CHARGE AND MARCH OFF, over a cliff in my view, but again so what. That is called LEADERSHIP, good or bad being different in the eyes of different people.

    And remember again, speeches do not spend money but real budgets do (when followed). I have heard all the speeches I need to hear. I instead would like to see real numbers in a budget that is debated up front and clearly. I have not seen such coming from Dems for four long years now that was fully debated and then approved by a majority of Congress. And YOUR President’s (actually ours) attempts to make Congress “do the right thing in spending” has failed miserably with his budget proposals never taken seriously by either side and actually VOTED upon, up or down.

    Anson

    Like

    • I think a huge reduction in the defense budget would be advised, as well as returning to the tax levels of the Clinton administration. Clinton was able to reduce spending and clear up the budget deficits from Reagan and Bush, Sr. (funny how Republicans worry about the deficit when a Democrat occupies the White House but completely forget it when a Republican is there). I also believe a thorough examination of those on Social Security and all other governmental disabilities need to be made to weed out those who are taking advantage of the system. Repealing the tax breaks for corporations who move their manufacturing overseas, as well as a tax on everything that is manufactured overseas at the expense of American workers, would also do a lot to reduce the deficit and return manufacturing jobs to this country, thus reducing the unemployment rate and putting people to work (public outrage at the increase in costs resulting from the tax would bring the jobs back to this country). These new workers would spend more, resulting in more domestic manufacturing, and everything would be on track again.

      The implementation of the Affordable Care Act, with a single payer system in effect, would also save the country money. Regarding defense, a 25% reduction in the budget, and moving that money to improving the infrastructure of this country, would put more people to work on a temporary basis until the manufacturing jobs return to this country and these public employees move back to the private sector.

      Gosh, that was easy, and some, but not all, of this has been supported by some Congressional members. Of course, members of BOTH parties do not want to offend the military-industrial complex, so the defense budget will probably remain intact. Too many politicians are indebted to the insurance companies, so there will not be a single-payer system, and we have seen Republicans stonewall any attempts to tax those who move their distribution operations overseas. In essence, then, it is politicians and their indebtedness to corporate and wealthy interests that keep the deficit high and a lack of a budget. A solution to that would be term limits and public financing of all campaigns. That way, Congress would represent the people and not the special interests.

      Like

    • Elaine Hines

       /  February 4, 2013

      Mr. Burlingame,

      In reference to my earlier comment sourced from Forbes:

      My question to you is–where did the Republicans spend all that money in the Reagan-Bush-Bush years? I can’t quite figure it out. I wonder if the shift in wealth from the 95% of us working class folks to the unfortunate, whining 5% could explain it.

      Like

  6. ansonburlingame

     /  February 4, 2013

    OK Jim,

    If such as you wrote above is in fact the will of the Democratic Party, then go do it, enact legislation to achieve each and every item you suggest above. Some of your objectives of course, like reducing unemployment are universal objectives. It is the means you propose to achieve such goals that can be argued, vigorously. But whatever the arguments might be, go ahead and write the legislation in the Democratically controlled Senate and then VOTE on it with your majority. WRITE A BUDGET AND VOTE ON IT, in the Senate is my only call for now so we can really see what you propose and not just talk about it in general terms.

    Only one quick question for you however. What do you propose to defend and where do you propose to defend it if we take DOD spending down to say $400 Billion a year. More specifically, and an area in which I have some experience, should part of those DOD cuts take us from 1500 to 300 total nuclear warheads, in the future???

    And what infrastructure will you rebuild, etc. with the left over $300 Billion from such cuts in DOD. I for one would propose to “pay for Medicare as we go” using most of that $300 Billion annual savings, at least until the next 9/11 happens.

    But you see there is a big rub, between you and me. You want to “cut” DOD and spend the money on new programs. IF we choose to cut DOD, rationally and I will argue my view of rationally but still propose big cuts, then I would use the money to pay for that which we already pay for but have to borrow 40 cents on the dollar to do so, today!!

    Go ahead Mr. Democratic Party and raise taxes as far as your Democratic majority can stand (but then check how future elections might turn out). Cut “favorite things” out of GOP sponsored programs as well, all you can do, democratically. But in the end start PAYING FOR THINGS, not borrowing to do so, for a start.

    One final suggestion for you Democrats. As a “money hungry conservative” I LOVE investment. But some investments produce a terrible ROI and no good investor keeps pouring money down a “hole” where the ROI is not achieved. Want some examples????

    Anson

    Like

  7. N.Michael Barrows

     /  February 4, 2013

    Duane,
    Thank you for the article on Kansas’ fauxnomics. But, as a former Kansan, you must know that fiscal policy means little to nothing to the voters in this state. Guns and God are the two main ‘political’ platforms that draw the attention (votes) of the people in my state. As long as the elected representatives allow their constituents to maintain The Bible in one hand and a gun in the other, we (Kansans) will continue to support them and be ignorant to the fact that their policies do little/nothing to benefit us. The voters in this state have decided that “if our First and Second Amendment rights are being protected, then surely our representatives are looking out for our best interests financially as well.”

    I wish more Kansans would read your article.

    Like

    • Michael,

      I don’t know what’s wrong with Kansans these days. I don’t know why so many there (and so many here in my part of Missouri) vote against their own economic interests. But the Brownback proposals will make the state less livable for a majority of working people and those who depend on government services from time to time or chronically. It’s sad watching it, but we are on the same path here in Missouri, if that makes you feel any better.

      What’s worse, unless Democrats get more involved in off-year elections (like 2014) there is no end in sight at the state level.

      RDG

      Like

      • Local, state, and national Democratic intentions are to get very involved in the off-year (2014) elections. While it is unlikely that there will be changes in this misguided area (but who knows what could happen if, or should I say when, the Missouri legislature goes really crazy), but we will sure as hell try.

        Like

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