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When Kansas cut taxes and California hiked them


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2016 Jun 17, 6:51am   9,760 views  15 comments

by finehoe   ➕follow (0)   💰tip   ignore  

In 2012, voters in California approved a measure to raise taxes on millionaires, bringing their top state income tax rate to 13.3 percent, the highest in the nation. Conservative economists predicted calamity, or at least a big slowdown in growth. Also that year, the governor of Kansas signed a series of changes to the state's tax code, including reducing income and sales tax rates. Conservative economists predicted a boom.

Neither of those predictions came true. Not right away -- California grew just fine in the year the tax hikes took effect -- and especially not in the medium term, as new economic data showed this week.

Now, correlation does not, as they say, equal causation, and two examples are but a small sample. But the divergent experiences of California and Kansas run counter to a popular view, particularly among conservative economists, that tax cuts tend to supercharge growth and tax increases chill it.

California's economy grew by 4.1 percent in 2015, according to new numbers from the Bureau of Economic Analysis, tying it with Oregon for the fastest state growth of the year. That was up from 3.1 percent growth for the Golden State in 2014, which was near the top of the national pack.

The Kansas economy, on the other hand, grew 0.2 percent in 2015. That's down from 1.2 percent in 2014, and below neighboring states such as Nebraska (2.1 percent) and Missouri (1.2 percent). Kansas ended the year with two consecutive quarters of negative growth -- a shrinking economy. By a common definition of the term, the state entered 2016 in recession.
https://www.washingtonpost.com/pb/news/wonk/wp/2016/06/17/one-state-raised-taxes-the-other-cut-them-guess-which-one-is-in-recession/

Comments 1 - 15 of 15        Search these comments

1   indigenous   2016 Jun 17, 7:32am  

Cherry picking. No context.

2   indigenous   2016 Jun 17, 7:49am  

That is funny, it assumes you do not have an advanced case of myopia.

The context says that Calif had a successful economy before the taxation. This is similar to Sweden.

This video is 1 minute long, not that you can focus long enough to watch it, but it perfectly explains the Calif situation. It sure as fuck is not because of Gov Brown.

www.youtube.com/embed/zhE_68GMJIk

3   indigenous   2016 Jun 17, 8:13am  

Alright, how was the video cherry picking?

4   indigenous   2016 Jun 17, 8:18am  

Get to work tardboy...

5   NDrLoR   2016 Jun 17, 9:01am  

It's funny how different forums have a personality of their own. This one generally seems to be filled with anger much of the time. I think my parents, and especially my mother, who lived to be 94, had the right perspective in being apolitical. She didn't vote or think about politics and once said as long as she was comfortable that's what was ultimately important to her. If people would just go along and take care of their business I think they'd be a lot happier.

6   Patrick   2016 Jun 17, 9:06am  

i think that amused skepticism is the right answer to most political questions.

a lol and a fact or two are more effective at changing minds than a strident argument.

7   indigenous   2016 Jun 17, 9:06am  

P N Dr Lo R says

This one generally seems to be filled with anger much of the time.

For me it is just about sport.

P N Dr Lo R says

once said as long as she was comfortable

Cept the liberties are fast disappearing making that comfort more elusive. As indicated in the exhausting 1 min video.

8   indigenous   2016 Jun 17, 9:08am  

rando says

a lol and a fact or two are more effective at changing minds than a strident argument.

Thank you.

9   Goran_K   2016 Jun 17, 9:34am  

Ironman says

The most delusional part is comparing the Kansas economy to the California economy. Talk about apples and oranges. But I would expect that from the OP.

I agree with this (I have no dog in this argument). But had Kansas raised taxes, would the economy have improved? This seems to be the natural and logical pivot of the OP's theory.

The reality is Kansas does not, and never has had the economic strength, human capital, and amount of private investment that California has had for the past 20 years. I think a better comparison could be California vs Texas IMO (don't know the details about Texas tax rates, but I'm sure someone does).

10   FortWayne   2016 Jun 17, 9:48am  

CA keeps taking away and redistributing and calling it a "budget surplus". That's just a shakedown what they do. To liberal commie fools this is of course "revenue growth". It's no different in reality from some thug putting a gun to your head and taking your wallet... because he would be "increasing his revenues" just the same way.

11   indigenous   2016 Jun 17, 11:08am  

Presidents have little to do with economic growth. Obama and Bush did endless things to kill the Golden Goose. But the economy grew anyway. Obama being one of the worst presidents in history because of his real legacy.

12   justme   2016 Jun 17, 11:52am  

finehoe says

In 2012, voters in California approved a measure to raise taxes on millionaires, bringing their top state income tax rate to 13.3 percent

For reference

https://ballotpedia.org/California_Proposition_30,_Sales_and_Income_Tax_Increase_%282012%29

It is not a tax on millionaires, it is a tax on yearly income in excess of 1M.

13   EBGuy   2016 Jun 17, 12:24pm  

You've got to feel sorry for those Cut and Gut Governors. They were hoping to run for they presidency this year but their tanking economies did them in.

14   FNWGMOBDVZXDNW   2016 Jun 17, 12:41pm  

The article would be more persuasive if it included more states or at least put into context how much these numbers fluctuate year to year. For example, Kansas is a big beef importer and a huge agricultural state. It would be interesting if they showed how the other ag states did. I don't think the size of the state's economy is relevant at all, because they are looking at percent growth. But the relative strengths of the primary industries of each state does make a difference.
I generally agree with the article that raising taxes doesn't always lead to slowing the economy and cutting taxes doesn't always make it grow.

15   HEY YOU   2016 Jun 17, 2:55pm  

Patrick says:".. fact or two.."

Got that covered.
Democrats are retarded.
Republicans are retarded.

And a bonus,Patnetters are brain dead.
I know brain dead,from personal experience, when I see it.

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