Youngkin’s “Aspiration” to Cut Taxes Were a Disaster in Kansas
by Casimir Eitnerby Casimir Eitner
Even though he has backed off a plan to eliminate state income taxes, Glenn Youngkin says it is still his “aspiration” if elected governor of Virginia to make deep cuts in state taxes. It may be a good time to remind ourselves of what happened when Kansas tried that nine years ago. The cuts, especially to higher earners and small business owners, pushed by their Republican governor Sam Brownback in 2012 were meant to boost the state’s economy.
They resulted instead in failure in virtually every measure of the state’s economic, educational and social performance. A Republican-controlled legislature eventually had to override Brownback’s veto and repeal the tax cuts in 2017 to avert further disaster. The economist who advised Brownback on those disastrous cuts was Stephen Morris who Youngkin says is now his advisor.
How bad was it? In one fiscal crisis after another Kansas repeatedly missed its payment obligations, endured nine budget cuts and three credit downgrades… which piled on higher borrowing costs… which led to more budget cuts. Education was particularly hard hit – with many school closures, shortened school years, teacher cuts, larger class sizes and many school programs eliminated. Large amounts of money had to be borrowed from the highway fund to cover the operating budgets, which in turn deteriorated transportation infrastructure.
And did it help grow the economy? On the contrary, during the five years before the law was repealed Kansas’ private sector job growth and economic growth as measured by its GDP were significantly lower than four of its five neighbors and less than half the national average. And despite eliminating state taxes for 200,000 small businesses, its growth rate in new business owners lagged most of its neighbor states and the US as a whole.
States that work hand in hand with companies to provide the education, healthcare, social programs and infrastructure that businesses need for their employees, so they can in turn focus on their business and prosper, do much better than states that cut taxes so the wealthy can get wealthier while working folks get the short end of the stick.
Hedge funds like the Carlyle Group that Mr. Youngkin ran make their whole business model around taking over private companies on the cheap, cutting their costs and moving jobs out of the country to improve short-term profitability, so that Carlyle’s investors can profit from eventual sales of the companies. There is nothing concrete or sustainable about that approach to build an economy, just financial engineering to make a quick buck. Let’s not let Virginia be a model for that approach. Think twice before voting for the hedge fund multimillionaire with no experience in sound public governance.
