The Republican gospel of cutting taxes and government services to the bone doesn’t lead to economic growth; it leads to crisis and decline. Just ask the people of Kansas, who finally have seen the light.
If House Speaker Paul D. Ryan (Wis.) and Senate Majority Leader Mitch McConnell (Ky.) don’t heed the Kansas lesson, they deserve to have their majorities stripped away in next year’s midterms. And they won’t be able to claim they weren’t warned.
The states are supposed to be laboratories for testing government policy. For five years, Kansas’s Republican governor, Sam Brownback, conducted the nation’s most radical exercise in trickle-down economics – a “real-live experiment,” he called it. He and the GOP-controlled legislature slashed the state’s already-low tax rates, eliminated state income tax for most owner-operated businesses and sharply reduced vital government services. These measures were supposed to deliver “a shot of adrenaline into the heart of the Kansas economy,” Brownback said.
It ended up being a shot of poison. Growth rates lagged behind those in neighboring states and the nation as a whole. Deficits mounted to unsustainable levels. Services withered. Brownback had set in motion a vicious cycle, not a virtuous one. Last week, finally, the legislature – still controlled by Republicans – overrode Brownback’s veto of legislation restoring taxation to sane levels. The nightmare experiment is coming to an end. The return to sane taxation will go a long way toward erasing a billion-dollar deficit. More revenue-raising measures may be needed, however, because education funding under Brownback was reduced to levels that the state Supreme Court recently ruled unconstitutional. It is unclear whether a $488 million increase for the schools over the next two years – which Brownback may still veto, or try to – is enough to satisfy the court. Republican leaders in Congress will probably try to ignore the Kansas fiasco or say Brownback’s implementation was flawed. But that would be unfair. All Brownback did was apply what passes for mainstream Republican orthodoxy these days: Cut taxes, eliminate regulation, shrink government, then stand back and watch as economic growth soars.
It just didn’t work.
It never works. Republicans cannot point to an instance in which this prescription has led to the promised Valhalla of skyrocketing growth. Before Kansas, they could at least argue that the program had only been attempted partially and piecemeal, never in full and unadulterated form. After Kansas, that excuse is gone. Eliminating business income taxes for owner-operated companies was supposed to induce entrepreneurs to move to Kansas from other states. It didn’t. It turned out that business owners take more than taxes into account when they decide where to locate. They want good health care and first-rate schools for themselves and their employees. They want modern, well-maintained infrastructure. In short, they want a healthy, functioning public sector. It also turns out that business owners do not decide whether to expand capacity or add employees based solely on the tax rate they must pay. Much more important is whether there is enough demand to justify such growth. If there is not – and the Kansas economy under Brownback was woefully sluggish – then tax savings will not be put to productive use. The Kansas Republicans who voted to abandon Brownback’s dead-end policies have been described in news stories as “moderate,” but many are actually quite conservative. They just decided to put reality before ideology.
President Trump and the Republican-led Congress, however, threaten to run Brownback’s experiment on a national scale, with predictably disastrous consequences. White House budget director Mick Mulvaney proposes amputational cuts to the social safety net and bureaus such as the State Department and the Environmental Protection Agency. And Trump’s “tax reform” plan proposes, among other cuts, to slash the top tax rate for “pass-through” businesses – basically, owner-operated firms such as the Trump Organization – from 39.6 percent to 15?percent. Claims that such action will lead to a surge in economic growth never had much credibility. Now, after the Kansas experiment, they have zero. It’s tempting to say fine, go for it, let the whole country see that the policy prescriptions championed by the Republican Party lead to nothing but a world of pain – except for the wealthy, who get to pad their bank accounts. But this is no academic exercise. Real people will suffer needlessly. The GOP trembles before tax-cut guru Grover Norquist, who wants to reduce government “to the size where I can drag it into the bathroom and drown it in the bathtub.” But it is failed trickle-down ideology that deserves to be snuffed out. And not just in Kansas.