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The interesting thing that happened when Kansas cut taxes and California hiked them
The Washington Post ^ | June 17, 2016 | By Jim Tankersley and Max Ehrenfreund

Posted on 06/18/2016 11:23:17 AM PDT by napscoordinator

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.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Government; Politics/Elections; US: California; US: Kansas; US: New York
KEYWORDS: california; demagogicparty; districtofcolumbia; fairtax; federal; flattax; jimtankersley; kansas; maxehrenfreund; memebuilding; obamarecession; obamataxhikes; partisanmediashill; partisanmediashills; tax; taxcuts; taxreform; washingtoncompost; washingtonpost
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I am surprised by this. It goes against everything that typically happens. But somehow it went the opposite direction for these two states. California is even putting 2 billion into a rainy day fund......Kansas? Not so much. Kansas has been going down hill for at least a decade. Sad.
1 posted on 06/18/2016 11:23:17 AM PDT by napscoordinator
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To: napscoordinator

Old saying...”...lonesome as a tourist in Kansas.”


2 posted on 06/18/2016 11:25:13 AM PDT by donozark (FAT PEOPLE ARE HARD TO KIDNAP!)
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To: napscoordinator

The tax cuts and increases had nothing to do with it.


3 posted on 06/18/2016 11:25:59 AM PDT by FreedomStar3028 (Somebody has to step forward and do what is right because it is right, otherwise no one will follow.)
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To: napscoordinator

Cherry picking statistics.


4 posted on 06/18/2016 11:27:24 AM PDT by wrench
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To: napscoordinator

Part of California’s success has been quantitative easing and efforts to prop up the stock market has caused a lot of California businesses to do very well. Coupled with their housing market being strong right now due to Chinese millionaires buying up everything for sale, the state has had growth.

Kansas relies on more traditional agriculture and petroleum for its money and both and still clobbered.

To analogize it, the rich kid made a ton of money working for his dad’s company and selling off his second hand goods to rich Chinese neighbors while the poor kid is struggling because the farm where he works is in drought.


5 posted on 06/18/2016 11:27:52 AM PDT by Bogey78O (We had a good run. Coulda been great still.)
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To: napscoordinator

If I was going to pick a control for comparison to a state with booming businesses in information tech and mass entertainment, it wouldn’t be Kansas.


6 posted on 06/18/2016 11:29:14 AM PDT by Stosh
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To: FreedomStar3028
California has benefitted from an infusion of cash from the federal government.

Kansas has been one of the states supporting that cash infusion and has suffered as a result.

7 posted on 06/18/2016 11:29:42 AM PDT by caltaxed
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To: napscoordinator

Kansas taxes are still awfully high.

They have a 3 tier state income tax 3.5%-6.45% to go with that state sales tax.


8 posted on 06/18/2016 11:31:58 AM PDT by Snickering Hound
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To: napscoordinator

California has an immense amount of talent and money coming into it whereas Kansas not so much.

Much of the money is coming from China. Fully one third of houses in San Francisco Los Angeles as well as Seattle are now being bought by overseas Chinese.

Americans are moving out of LA and San Francisco.

The talent coming into California is coming from both the USA and overseas. Silicon valley sinecures are now the coveted ivy leage positions like wall st was two decades ago. 37% of silicon valley workers are foreign born.

The USA has many centers of intellectual property generation
but the greatest of these are in the silicon valley and LA area.

Kansas does not develop much intellectual property.


9 posted on 06/18/2016 11:33:01 AM PDT by ckilmer (q e)
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To: napscoordinator

A lot of tax revenue CA gets comes from capital gains so when the stock market does good as it has been, they do good. Wait till the stock market dives and see what happens.


10 posted on 06/18/2016 11:33:46 AM PDT by Rusty0604
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To: napscoordinator

Comparing Kansas to California?!?! Hey asshats, how about apples to apples here. How is California doing compared to Texas? Silence to ensue.


11 posted on 06/18/2016 11:34:47 AM PDT by FlipWilson
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To: AdmSmith; AnonymousConservative; Berosus; Bockscar; cardinal4; ColdOne; Convert from ECUSA; ...

Partisan Media Shills Alert!

California still is lousy with liberal entertainment industry nitwit millionnaires, Kansas not so much. This is just another party-line BS straw man argument.

12 posted on 06/18/2016 11:35:19 AM PDT by SunkenCiv (I'll tell you what's wrong with society -- no one drinks from the skulls of their enemies anymore.)
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To: Stosh

Perfect comparison for democrats that love taxes.


13 posted on 06/18/2016 11:35:36 AM PDT by Rusty0604
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To: napscoordinator

Kansas is a farming state, influenced more by the price of grains, which are currently low, than the tax rate.


14 posted on 06/18/2016 11:39:36 AM PDT by Kenny500c
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To: Stosh

A+, it is like comparing an orange to a cucumber in terms of sugar content. This is a great example of bias in statistics.


15 posted on 06/18/2016 11:40:11 AM PDT by Do the math (Doug)
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To: napscoordinator

Wasn’t it the Washington Post a few years back that scrambled to give out bonuses to its staff before the Obamacare tables went into effect?


16 posted on 06/18/2016 11:42:04 AM PDT by Tzimisce
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To: ckilmer

Thanks, I learned a new word which describes a lot Californians and sinecure pundits in the DC area.

• sinecure •

Pronunciation: si-nê-kyur •
Part of Speech: Noun
Meaning: 1. Any position with compensation but few or no duties or responsibilities: a featherbed position. 2. An ecclesiastical benefice with no attached spiritual duties in a parish.
Notes: Sinecures are one of those frustrating manifestations of our society that lead to both anger and humor. It has a rather pompous synonym, sinecureship, as one might hold a high sinecureship in government. Then there is the adjective sinecured, as to marry someone sinecured for life, not to mention sinecurism, the practice of allowing or holding sinecures.

In Play: Sinecures are popular positions for incompetent relatives: “Seamus Allgood is working out well in the sinecure his uncle gave him in his company.” Doesn’t it seem that every job but yours is a sinecure? “Lucille Ondaflor was too young to retire, so they transmoted her to a sinecure in mailroom management.”

Word History: Today’s word comes from a Medieval Latin phrase, beneficium sine cura “an endowed Church office without the care (of souls), as opposed to a curate, who is a pastor with a flock of souls. The phrase underlying today’s word is Latin sine “without” and cura “care, concern”. English derives cure and curator from the same root via various routes—but not curare.

This word is a corruption of wurari, a word from Macusi, a Carib dialect spoken by the Indians of Guiana. (Today’s Good Word was a suggestion of Aaron Corday, a contributor in our Alpha Agora, who obviously cares a great deal about words.)

http://www.alphadictionary.com/goodword/word/sinecure


17 posted on 06/18/2016 11:47:57 AM PDT by Grampa Dave (La Raza thugs in America are Mexico's form of Isis terrorism/terrorists/invaders!!)
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To: napscoordinator

“2 billion into a rainy day fund”

They can say only because they are kicking the can down the road on underfunded pensions.


18 posted on 06/18/2016 11:50:28 AM PDT by MaxistheBest
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To: napscoordinator

Also, California was hit hard by the recession. So they were going to grow more by percentage because they were hit harder. When the next one comes, There will be fewer wealthy people and more poor people in California. Almost all of this comes from a few companies in Silicon Valley. You take out LA and San Fran and you have a shaky economy. Don’t worry they won’t make it through the next slow down.


19 posted on 06/18/2016 12:03:58 PM PDT by poinq
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To: napscoordinator

As I sit here in Kansas, a few opinions.

First, much of our economy is tied to agricultural commodities...recessions aren’t as bad for us, and the rebounds aren’t as steep.

Next - this is the first year in seven where no part of Kansas is considered to be in drought...remember those ag commodities.

What else do we produce? Oil. Those ‘evil Koch brothers’ are in the oil and gas business in Kansas, in case you’ve never thought of Kansas as an oil producing state. Well, that sector had a rapid growth but is now declining.

Another factor in our state budget: The state supreme court is unconstitutionally dictating state education funding...causing endless special legislative sessions, raiding of highway funds and rainy day funds, and great uncertainty as the state abdicates other responsibilities (to pay for mandated education funds) and forces the counties to suddenly take over - and figure out how to fund them.

And there is a constant clamoring to raise taxes...and I’m confident when Brownback goes, taxes will be raised.

In other words, primarily because liberals will not accept that they lost an election, they refuse to allow us to have a predictable and stabile economic environment...they create chaos and blame Brownback.


20 posted on 06/18/2016 12:06:13 PM PDT by lacrew
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