The budget problem in Kansas is the result of “irresponsible tax cutting,” according to Steve Rose, publisher of the Johnson County Sun.
He really wrote that.
Rose’s piece We’ve cut our way into this crisis mentions by name many of the taxes that we’ve reduced in Kansas.
He really believes these cuts are the source of the problem. He says “we knocked ourselves for a loop by cutting and cutting and cutting taxes over the past 15 years. We have had a wild tax-cutting orgy.”
Rose cites a study that sums the costs of all the Kansas tax cuts since 1995. “The cumulative impact on Kansas, the study finds, is a loss of $7.6 billion in revenue during that period. We are now losing about $600 million a year from tax cuts.”
There are several flaws in this line of thinking.
First is the belief of Mr. Rose that the money belongs to the government first, so that any give-backs to the people in the form of tax cuts are a “cost” to government. That’s not the right way to think of these things. Money belongs to the people. Taxes are a cost to people.
Second, had the state had these tax revenues during these years, it is certain that the money would have been spent. Whenever revenue goes up, politicians find something it needs to be spent on.
Third, revenue flowing to the state has been increasing rapidly. Even with tax cuts.
Finally, Kansas, over the long term, is becoming a high tax-state. This chart shows Kansas’ rank among the states for tax burden. A low ranking means the burden is high.
Over the 30 years represented in this chart, it’s evident that Kansas has moved from a low-tax state to becoming a high-tax state. For much of the 2000s, Kansas was moving in the right direction. Compared to the other states, that is, but considering the situation in many states, that may not be saying much. But for the past few years, Kansas is moving in the wrong direction, relative to other states.
The sense of entitlement by government to tax revenue is usually limited to government officials. A few years ago Governor Kathleen Sebelius, when discussing a business machinery tax cut, she said “We’re not giving away money for the sake of giving it away.” (See Paying For Tax Cuts.) This is another example of a politician believing the money belongs to them first. Tax cuts are a gift, according to Sebelius.
Why Mr. Rose, a businessman, would align himself with big-taxing liberals like our governor is beyond my understanding.