As Washington considers federal taxes, reporters (and opinion writers disguised as reporters) are descending on Kansas to explain what happened when the Sunflower State slashed income tax rates across the board. They aren’t getting the full story.
It’s obvious in the stories leaking out of Kansas about the so-called “Brownback tax experiment.” Compare, for example, a recent NPR story: “As Trump Proposes Tax Cuts, Kansas Deals With Aftermath Of Experiment,” and a 2016 column in Investor’s Business Daily. (Subscription required, but it is reprinted on Georgia Public Policy Foundation’s website.)
The NPR story calls Kansas 2012 tax policy “notorious,” and relies on Burdett Loomis, a University of Kansas political science professor to explain what happened. Kansans recognize that Loomis is often an unpaid hand of the Democratic press machine. His son, Dakota Loomis, was the communications director for the Kansas Democratic Party until he was relieved of that responsibility after posting unflattering comments about parts of Kansas on a sports forum.
“My personal thought here is that Brownback came back to Kansas from the (U.S.) Senate to demonstrate that Kansas could be this small government heaven on Earth that would help him honestly run for president in 2012,” Loomis told NPR.
There’s no mention beyond Loomis’ statement about how 2012 Kansas tax policy came to exist. For that, readers must look elsewhere. They can find some of that critical information in the Georgia Public Policy Foundation post penned by Art Laffer and Stephen Moore, famous economists.
They lay out the sorry state of Kansas’ fiscal affairs before Brownback took office. The economists note that Kansas unemployment then was 6.8 percent. (It’s now settled at record level lows below 4 percent.) Laffer and Moore also note that between 1992 and 2012, Kansas experienced a net loss of adjusted gross income (AGI) compared to the rest of the nation. Had AGI been zero rather than negative over those two decades, the state would now have $4 billion of additional AGI per year.
The economists describe the initial 2012 tax policy proposal: A modest flattening income tax rates and exempting pass-through income for state income taxes in exchange for some “pay-fors” of eliminating some tax credits and deductions. Brownback’s proposal, as originally designed, would have reduced the state’s revenues by about $90 million.
Politics intruded, according Laffer and Moore who were involved with Kansas 2012 tax policy from the start. The NPR article doesn’t bother explaining the messy politics that included Brownback’s opposition poisoning the legislation by taking out all of the pay-fors. The end result was a bill that showed revenues $230 million lower.
Laffer and Moore say that big change in addition to a series of economic factors, like missed capital gains projections and drastic dips in oil, gas, aerospace and ag industries, created fiscal challenges for Kansas after 2012. NPR theorizes budget challenges were the result of big businesses exploiting the pass-through exemption by converting their tax statuses. That myth has been frequently dispelled, but NPR regurgitated it anyway.
“Others supposedly lied on their tax forms,” the NPR story reads.
The word “supposedly,” suggests the story’s authors knew they weren’t reporting facts. That mischaracterization of events is hardly the worst in the NPR story. The authors write, “State lawmakers tried to balance the budget by tapping into reserves and the highway fund.” They fail to add the context that the latest budget, which was passed on the heels of the largest tax increase in Kansas state history, also moved money from highway funds. They ignore completely that the latest budget will be busted in three years– sooner, if lawmakers give in to Kansas Supreme Court demands for additional school funding.
Most egregiously, they trot out the myth that the state “closed and consolidated several school districts” after the 2012 tax policy took effect. Local districts make those decisions, and not a single school district in Kansas consolidated between 2012 and 2016.
The NPR writers then delve into the motives of Brownback. Without so much of a hint of attempting to get the Governor on record, the mind readers at NPR write, “Because of the state’s deficit problems, Brownback did not run for President in 2012.” They pen, “And he barely won re-election in 2014.”
The election numbers are a statement of fact, but the word “barely” is opinion. Brownback carried 98 of 105 Kansas counties, garnering 32,000-plus more votes than his Democratic opponent.
Laffer and Moore described the 2014 election this way, “In November 2014, in spite of all the national backlash, Brownback was easily re-nominated and reelected, along with U.S. Senator Pat Roberts. After the elections, the Kansas House and Senate were even more Republican than they had been when Brownback took office,” the economists explained.
Pew Research Center discovered in 2016 that partisans consume news differently.
“When it comes to getting news about politics and government, liberals and conservatives inhabit different worlds. There is little overlap in the news sources they turn to and trust,” Pew’s research determined.
Laffer and Moore and the reporters at NPR are speaking different languages to vastly different audiences. News consumers aren’t getting the full story unless they seek out more than one source.