This headline from the Washington Examiner posted by Google News is a shocker: “As Congress debates tax reform, don’t be deceived by tax myths about Kansas.”
What is shocking is this: each morning, Google News sorts out the top stories about Kansas and posts them in what would seem like the order of importance. In the past year, Google must have posted 20 stories recycling the various Democratic tax myths, any number of which the Sentinel has reported and assessed.
A week ago, for instance, U.S. Senate Democrats hosted an unofficial hearing on the subject of tax reform, using the Kansas experiment as textbook negative example. Said Kansas House Minority Leader Jim Ward, enjoying his unprecedented moment in the sun, “The great experiment was a complete and utter failure that nearly bankrupted our state.”
Given this pattern, it was refreshing to find an article in the Examiner that gets beyond the myths. Scrolling down, one finds that the author is none other than Dave Trabert of the Kansas Policy Institute, an organization with which the Sentinel has a relationship.
All disclaimers aside, no one knows the arc of the Kansas tax experiment better than Trabert. Yes, Trabert concedes, Kansas does have budget problems. Complicating revenue collection was the fact that Kansas suffered steep and unexpected declines in the market price of its core resources–oil, gas, and agricultural products. That said, the problems were less on the revenue side than the spending side.
“Every state provides the same basket of services,” writes Trabert, “but those that do so at better prices can keep taxes lower. Kansas needed only to go from being morbidly inefficient to grossly inefficient to balance the budget, but legislators in both parties increased spending instead.”
This part of the story is rarely told. Untold too is the fact that that cutting taxes on small business spurred private sector job growth in easily quantifiable ways. Pass-through companies, which enjoyed significant tax relief, nearly quadrupled their annual growth, virtually all of which was organic.
“Given the entrepreneurial spirit of small businesses and knowing that the U.S. is critically dependent upon the creation of new establishments,” writes Trabert, “it’s in the nation’s best interest to cut small business taxes.”
Trabert concludes, “Those attempting to scuttle federal tax reform by misrepresenting what happened in Kansas are simply trying to justify high taxes for political purposes.”