In 2012, Kansas embarked on what its Republican governor called “a real live experiment” to prove that deep reductions in the state’s income tax would supercharge the economy without hobbling education and other state services.
It was a catastrophe. Within five years, under withering public anger over the resulting massive cuts to education and other state services, the Kansas Legislature scrambled to restore previous tax levels. The GOP’s loss of the governor’s office in 2018 was widely attributed to backlash over what had come to be known, infamously, as the “Kansas experiment.”
So, naturally, all three of Missouri’s current major Republican gubernatorial candidates want to give it a try here. What could go wrong?
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Missouri Secretary of State Jay Ashcroft, state Sen. Bill Eigel and Lt. Gov. Mike Kehoe, squaring off for the GOP gubernatorial nomination this year, are now all on record as vowing to eliminate the state’s individual income tax, which makes up two-thirds of the state’s general revenue. It’s an even more radical proposal than the deep tax cuts that proved so catastrophic in Kansas.
Missouri’s graduated state income tax rate for individuals tops out at 4.95%, well below the more than 6% national average among the 41 states that tax individual income. (The other nine tend to have economies either augmented by massive oil or tourism industries, or by higher rates on other forms of taxation.)
It’s not like Missouri government is functioning so well that it can afford to reduce its budget revenue. The state has among America’s lowest-paid teachers. Last year, Missouri missed out on more than $40 million in federal funding for lunches to lower-income school kids in part because the state’s outdated computer systems made participation too complicated. Missouri’s notoriously low state employee pay has caused worker shortages that have endangered abused kids and elderly veterans served by state programs.
Yet Ashcroft this week told the Missouri Independent the state could function just fine without the more than $8 billion it takes in annually from the individual income tax, by just reducing or eliminating state services deemed to not be “core responsibilities of the government.”
He didn’t specify, of course, what services to Missouri residents would be cut.
On his campaign website, Ashcroft lists a “task force of experts” he would rely upon to advise him on how to institute the tax cuts. As the Independent notes, it includes at least three nationally known conservative economists who advised former Kansas Gov. Sam Brownback on his ill-fated experiment.
It’s a good thing the architects of the Leaning Tower of Pisa are long dead, or Ashcroft might have wanted to hire them as state building contractors.
Ashcroft also calls for repealing the 12.5-cent gas tax increase the Legislature approved in 2021. That increase brought the tax, previously among the lowest in the U.S., into line with most other states to address the shameful condition of Missouri’s highway infrastructure, long ranked among the nation’s worst.
In a campaign video, Ashcroft acknowledges that roads and bridges are “fundamental responsibilities of government,” but says they can be paid for with general revenue — the very revenue provided primarily by the income tax — instead of a dedicated gas tax.
Two problems, Mr. Secretary: One, user taxes like the gas tax are the fairest and most efficient kind. It’s paid only by those who actually use the roads, so even out-of-staters just driving through end up contributing something.
And, two, you just proposed giving up $2 of every $3 the state collects in general revenue, offsetting it with service cuts — and now you’re going to add the massive new expense of highway infrastructure to things that the remaining $1 has to pay for? How will there be anything left to serve the ailing veterans and abused kids already being failed by this state?
Eigel has previously called for elimination of the state income tax. Kehoe’s campaign, in response to the question from the Independent, said he supports the idea as well.
So all three of the major Republican gubernatorial hopefuls this year are fully vested in one of the most thoroughly discredited economic schemes in all of government.
Since the Reagan era, conservatives have backed the concept of supply-side economics — that tax cuts for higher earners can spur enough new economic activity to offset the loss of revenue to government budgets — with almost religious fervor.
Never mind that Ronald Reagan’s tax cuts ushered in the era of massive federal budget deficits. Or that Bill Clinton, who raised taxes, not only presided over a stronger economy than Reagan’s, but is the only modern president to deliver budget surpluses.
Never mind that “it will pay for itself” was the explicit argument from congressional Republicans who in 2017 passed a massive tax-cut package that primarily benefitted corporations and upper-income individuals. The nonpartisan Congressional Budget Office says it will actually add to the deficit by almost $2 trillion over 10 years.
And never mind that before Kansas’ “experiment” was over, the state’s finances were so devastated that it was raiding highway funds for other expenses, putting off payments to government agencies, hiking sales taxes (which burden the poor the most) and starving schools for money to the point that the state supreme court had to step in.
This is what Missouri’s top three gubernatorial candidates are promising to deliver to their state. Believe them.