House Speaker Paul Ryan wants his trickle-down tax “reform” passed this year. Speaking before
the National Association of Manufacturers (NAM) annual convention recently, he said, “there is an opportunity to do something transformational — something that will have a truly lasting impact long after we are gone.”
About 99.6 percent of Ryan’s tax cuts would go to the top 1 percent of taxpayers, according to an analysis by the Tax Policy Center. On average, the richest Americans would see an 11 percent increase in their after-tax incomes. Meanwhile, the middle fifth of households would receive just $60.
Ryan told the NAM audience that he wants to make the tax cuts permanent in order to avoid the experience of the Bush-era tax cuts, which expired after a decade. “Businesses need to have confidence that we won’t pull the rug out from under them,” he said.
Ryan trotted out the old argument that cutting the taxes of the rich spurs job growth. He wants to do what Governor Sam Brownback did to Kansas with his big tax cuts of 2012. Ryan and Brownback were a team in the mid-1990s when Newt Gingrich tried to revive Reagan-era policies. Brownback was a U.S. Senator and Ryan was his legislative director.
As governor, Brownback claimed his Kansas plan would “create tens of thousands of new jobs and help make Kansas the best place in America to start and grow a small business.”
That didn’t work out. Justin Miller reports in The American Prospect:
“Five years in, Kansas’s economy has lagged behind its neighboring states, failed to create a jobs boom, and led to a revenue shortfall that brought the state to the brink of fiscal catastrophe. Spending on schools, infrastructure, and social services was continually cut, even as Brownback tried to further ratchet down tax rates.”
For a number of years, Brownback was rated as the least popular governor in the country. Recently, he became the second least popular governor, losing out to Chris Christie of New Jersey.
Then this month, the Republican-controlled state legislature dealt Brownback a huge defeat. The headline in the Los Angeles Times said, “It’s the end of the road for the GOP’s big tax experiment in Kansas.” Brownback’s massive tax cuts were demolished as legislators voted for a bill to increase income taxes and raise a projected $1.2 billion over the next two years. The state had been facing an $889-million budget shortfall through June 2019.
Brownback responded by vetoing the bill. A coalition of Republicans and Democrats united to override the veto with a two-third’s majority in both chambers. State Senator Dinah Sykes was one of the Republicans who voted to override. She told the New York Times that people in her district were outraged at the damage being done to Kansas. “Email after email after email I get from constituents saying, ‘Please, let’s stop this experiment,’” she said.
The state had faced a budget crisis every six months from November 2014 onward. State programs were continually slashed under Brownback. At one point, The state Supreme Court intervened and said the budget didn’t provide enough funding for the state’s public school system. The state’s credit rating got downgraded twice. Then the voters responded.
Brian Lowry, political reporter for the Kansas City Star, notes:
“While a lot of the country swung to the right in 2016, Kansas swung back toward the center. Moderate Republicans ousted conservative incumbents in the August primary last year, and Democrats also made gains in the November general election — even though the state went for Trump by double digits. These candidates won their elections specifically by campaigning on a promise to repeal Gov. Sam Brownback’s 2012 tax cuts.”
Despite this, the Trump administration and the House GOP are determined to nationalize this experiment.
The fight against tax cuts for the rich will be more difficult than many progressives might think. There’s a lot of ignorance and misinformation out there. This April, NPR reported on a poll that found that 44 percent of Americans mistakenly believe that rich people pay more now than they did in 1980, when the top marginal income tax rate was 70 percent. The wealthy actually pay 39.6 percent today. Among Republicans, 52 percent believe this false picture, compared to just 28 percent who don’t. Democrats were almost evenly split, 39 percent to 43 percent.
However, a majority of Americans reject the Ryan/Trump notion that tax cuts for the rich spur faster growth by 63 percent to 37 percent. That’s a good start.
This opinion column does not necessarily reflect the views of Boulder Weekly.