Don’t Be Kansas: Impact of Massive Tax Cuts on Kansas Offers a Warning to Wisconsin
Tax Cuts in Kansas Have Failed to Boost Economy, Harmed Schools and Other Services
Wisconsin lawmakers advocating for more tax cuts should consider the example of Kansas, a state that has pushed through enormous tax cuts and that has been held up by tax-cut proponents as a model worth replicating.
The massive tax cuts in Kansas have deepened the damage done to schools, colleges and universities, and other key services by the recession and have failed to improve Kansas’s economic performance, according to a new report from the nonpartisan Center on Budget and Policy Priorities. Kansas should serve as a cautionary tale for Wisconsin, not a model.
The tax cuts passed in Kansas are larger than the ones that have been passed in Wisconsin starting in 2011, but otherwise they share many characteristics. In both states, tax cuts helped the rich much more than most state residents, making income inequality worse. And both states have recently raised taxes on low-income families working to climb into the middle class.
We already know that a series of tax cuts in Wisconsin have done little to improve the state’s economy. Despite claims that cutting taxes would spur job creation, Wisconsin continues to lag the national and regional averages in job growth. Personal income has grown more slowly than the national average, according to new figures released this week. The loss of revenue caused by the tax cuts contributed to deep cuts in state support for schools, ranking Wisconsin among the states that have made the steepest cuts to education. This loss of investment in Wisconsin’s future workforce will have long-term damaging effects on the economy.
Like Wisconsin, Kansas has failed to receive an economic boost from tax cuts. Job growth in Kansas has been slower than the national average since the tax cuts took effect and its labor force has actually shrunk during that period. The number of new businesses in Kansas grew more slowly last year than in the year before the tax cuts took effect.
The huge tax cuts in Kansas have left the state’s schools stuck in the recession and continuing to decline. School districts across the state have had to layoff teachers and counselors, and cut programs for students since the recession hit.
Instead of following the example of Kansas, policymakers in Wisconsin should acknowledge that high-quality schools and universities as well as other key services are a crucial building block of economic growth and help make communities healthier, safer and more livable – all important factors in attracting businesses and boosting long-term growth. By focusing on tax cuts and shortchanging other priorities, Wisconsin, Kansas, and other states that follow in the same footsteps are setting themselves up for trouble down the road.