By signing a budget that slashes income taxes, Kansas Gov. Sam Brownback is allowing people to keep more of the money they earn.
For most, this seems like a reasoned, sensible approach to jump-starting the Kansas economy. The insane among us are loudly proclaiming that Brownback has got some nerve.
Under the plan, most individuals will get an income tax cut. More than 190,000 businesses will pay no income tax on non-wage income.
Brownback says it will ignite the state’s economy, add jobs and fuel the state’s recovery. It makes sense to me, so I’ll try to explain how the governor’s diabolical scheme works in terms so simple, even liberals can understand:
When people have extra cash, they usually spend it. If they use the extra bucks at a local restaurant, it helps that restaurant stay in business. If enough people spend their dollars there, its owners hire more staff. (Jobs are good.)
Or, even better, the eatery owners are so swamped with cash they expand. In addition to hiring new staff, expansion requires employing construction workers.
The construction company hires more people to take on the additional project. That rising tide of economic activity exponentially lifts even more boats.
The extra jobs and sales result in more income tax and sales taxes, which will be used to fund schools and roads. Even if fiscally conservative Kansans choose to pad their savings accounts instead of dining in restaurants, banks can use that money to make loans to potential homebuyers or invest in businesses.
That also greases the wheels of growth. These economic principles are so basic they’re even taught in the public schools, and yet hysterical Kansans continue to fret about keeping more money for themselves.
They apparently believe an army of pencil pushers will spend the money better than they can. “This is a tax bill that only a deficit-spending politician who has spent his career in Washington, D.C., could love,” Rochelle Chronister, a former chair of the Kansas Republican Party, told the Lawrence Journal-World.
Sigh. It takes a deficit-spending politician to know one, I guess. Critics of the budget argue that it will produce a budget deficit within the next six years.
The legislative research department confirms those projections, but a projection of budget shortfalls in outer years is hardly unusual. For example, in 2002 state officials projected a $254.3 million budget deficit for the following year and a $700 million shortfall in 2004.
Somehow, we survived back then with little more than 18 months’ notice. Typically, budget shortfall projections are a result of unsustainable spending.
I don’t remember much caterwauling in all the years that was occurring. Sen. Laura Kelly, a Topeka Democrat, whined to the Huffington Post.
“The impact on this state would be beyond the pale devastating,” Kelly told the blog. “We’d be underwater. We would have to make massive cuts.”
That’s kind of the point. Government spends too much. Brownback’s budget forces legislators to prioritize and find ways to do more with less. I can’t seem to shed a single tear about it.
Next year, taxpayers get to keep the change, and over the course of the next few years, one of two things will have to happen: the Legislature will have to spend less, or the economy will improve to sustain the tax cuts. Sane people are rejoicing.
Freelance columnist Danedri Herbert writes in this space once a month.