Kansas’s experiment with Tea Party governance is uniting skeptics—both left and right. Tax experts in Washington, DC have joined non-Tea Party Republicans in the Kansas legislature in expressing concern that the tax reform signed into law by Governor Sam Brownback went way too far with its tax cuts. The bill, which slashes top income rates and corporate rates and exempts all pass-through business income, makes Joseph Henchman of the right-leaning Tax Foundation uneasy:
[The legislature] just passed a tax cut, which can be justifiable if you want to reduce the size of government or expect other revenue sources to go up. But they didn’t cut spending and they don’t expect revenue to grow, so it’s just a hole. With the exemption for pass-through entities, if you’re a wage earner, you’re taxed at the top rate, which is currently 4.9 percent in Kansas. If you’re a partnership, an LLC or any form of recognized business entity with limited liability that’s not a corporation, you’re income is taxed at zero percent. That’s an incentive to game the tax system without doing anything productive for the economy.
Nick Johnson of the left-leaning Center on Budget and Policy Priorities says the measure is unprecedented:
The real big problem here is that because it costs so much money, it will make it harder for Kansas to make other kinds of investments that are important to a strong economy like education and infrastructure. People don’t understand the scale of what’s been enacted—it’s jaw dropping. I’m hard-pressed to identify another state that has ever passed a larger tax cut package overall to its budget.
The experts think that the type and number of tax cuts the Kansas Tea Party wants don’t seem affordable, sustainable, or good for economic growth. Add to these problems the fact that the system could harm low-income taxpayers while favoring high earners, and this looks like a governing agenda that, unless the results prove the experts wrong, will be difficult to sell at the national level, to put it mildly.
Like Louisiana Governor Bobby Jindal, who was forced to withdraw an ambitious tax plan of his own, Sam Brownback is sagging in statewide opinion polls. If even the reddest of red states is chafing under Tea Party governance, the movement may have to go back to the drawing board.