This is the second of a three-part blog series presenting voices from other states that have unsuccessfully pursued versions of comprehensive tax “reform.” (See Part 1)
Commentary provided by Annie McKay, Executive Director of Kansas Center for Economic Growth in Topeka, KS.
Kansas’ Glide Path to the Bottom
Kansas should be on the road to recovery, climbing out of the hole created by the Great Recession. But instead we are on a path to more economic pain and uncertainty because of unaffordable tax cuts and the resulting cuts to services that erode the very foundations of our prosperity. Kansas policymakers have an opportunity to heed the lessons learned one year after its costly tax cut experiment and change course — before it’s too late.
Unfortunately, lawmakers look to be doubling down on the damage already done. Even as the House and Senate make up for the even deeper hole they created with tax cuts by cutting vital services for seniors and education funding for our children, and by permanently hiking the sales tax on everyone, they are moving forward with plans to eliminate the income tax.
It is indeed a glide path to zero, as it’s been dubbed–zero income tax, zero investment in the things that matter most, and zero prospects for a better future. Financial support for K-12 spending is already down 13.2% since 2008; cuts to higher education have forced an average annual tuition increase of nearly $1,000 at our public universities; and now we may end up raiding funds that we socked away for desperately needed road and transportation work.
The income tax makes up 46.5% of the resources we have available for investments like K-12 schools, our system of higher education, public safety, and much, much more. Unless we’re prepared to take an axe to our most important investments, other taxes will go up. And that’s where we’re headed–higher sales and property taxes.
With all of this pain, will we see the job growth that was promised? The evidence and experience of other states show us that this outcome is unlikely. Even Joe Henchman of the conservative Tax Foundation recently said that last year’s tax cuts provide “an incentive [for businesses] to game the tax system without doing anything productive for the economy.”
We can’t continue down this road without doing permanent damage to the state’s future, raising other taxes, or some combination of the two. If lawmakers want to keep a bad situation from getting even worse, they’ll abandon their glide path to the bottom.