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

[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.

[Grampa Dave]

“Btw, for some reason, your link wasn’t going to the correct page. Here it is again -

https://en.m.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_(nominal)";

Thanks for the corrected link.

Like you, I detest/hate the liberal politics in California. However, as a resident since the early 70’s with a MBA, I know how powerful this economy has been and will be.

In spite of the enviro whackos and anti business lefties, California’s diverse economy continues to produce and will.

The wine industry and its successes from just south of the Oregon border to the Santa Barbara area is an incredible economic power.

The upscale restaurants have located near those top end vineyards/winemakers and have made California a top bucket list of foodies around the round. That increases the demand for upscale lodging and homes in those areas. This increases the price of homes. The Chinese, refugees from Houston, LA and NYC are willing to bid on homes in these areas and drive prices up and up.

Stanford, Cal Poly and Cal Tech are leaders in today’s education demands for our growing hi tech world and real engineers not PC snowflake idiots with instant unemployment degrees in LGBT and third world studies.

These universities and Silicon Valley industries look for future students/employees at the math Olympiads and Olympiad of the Mind events where grade school to high school achievers compete. Those selected will drive the California economy even higher when they become producers.

[bert]

Convenient apples and oranges.

Kansas no silicon valley....... it’s that simple

the growth in silicon valley is greater than the losses in LA and elsewhere from corporate movements out of state.

[AllAmericanGirl44]

bkmk