Despite history, GOP still wed to trickle-down economics

U.S. Rep. Tom Price, R-Ga.

U.S. Rep. Tom Price, R-Ga.

Congressional Republicans, led by U.S. Rep. Tom Price of Georgia and others, have reportedly decided to introduce so-called “dynamic scoring” into the preparation of the federal budget. Under that approach, they propose to just “assume” that their favored economic policies, such as tax cuts for corporations and the rich, will produce additional economic growth and jobs and thus additional federal revenue.

Then they’ll go ahead and make policy based on that additional revenue, before this supposed “economic boom” materializes. (Ironically, they call that approach “conservative”.) The first step in implementing that approach will reportedly be the replacement of Douglas Elmendorf, head of the Congressional Budget Office, with a director more amenable to GOP illusions.

With that in mind, let’s update ourselves on the experiment still playing out in the Sunflower State …

Back in 2012 and 2013, you may recall, Kansas Gov. Sam Brownback and his GOP allies in the Legislature passed significant tax reductions, for example cutting the top income-tax rate by 29 percent and exempting 191,000 small businesses altogether from the income tax. At the urging of conservative celebrity economist Arthur Laffer, they then used “dynamic scoring” to assume that their tax cuts would inspire significant job growth and revenue growth and allow them to balance the state budget.

It hasn’t panned out. None of it. Last year, state revenue was $330 million below what “dynamic scoring” had predicted, which is a lot in state with a population less than a third the size of Georgia’s. After draining reserves and making cuts that he had promised would never be necessary, Brownback narrowly won re-election by promising that the worst was over and things would improve quickly.

Within days of the election, new projections were released showing the financial picture had instead gotten significantly worse, with revenue now projected to fall below predictions by more than $1 billion over the next two years. Just to get through the rest of fiscal 2015, the state faced a $280 million shortfall, which Brownback proposes to close in part by raiding transportation and early-childhood-education trust funds and cutting pension contributions for state employees. (Even before those cuts, the state faces court rulings that education funding falls $548 million short of its own constitutional requirement of “adequacy.”)

Last week came news that revenue in January had come in $47 million lower than the already lowered projections in November had predicted, which in turn were significantly lower than the projections of last April.

Oh, and what about all the jobs that the tax package was supposed to create? Since passage of those job-growing tax cuts, the Kansas City Star reports, Kansas has ranked 38th in job growth. In 2014, we added 2.6 million jobs nationwide, but job growth in Kansas averaged 1,000 a month.

The situation has gotten so bad that Brownback, the king of tax cuts, is now proposing significant tax hikes on cigarettes and alcohol to help close the huge gap. But so far, Republican legislators are balking, insisting that they will continue to govern by credo (“We don’t have a revenue problem, we have a spending problem”) rather than pragmatism.

Again, just as in Washington.

Reader Comments 0

1397 comments
JohnnyReb
JohnnyReb

Since our Liberal friends have such a problem with trickle down, let's change to the pie theory.


The bigger the pie, the more they can have.


Let them choose a pie they like - chocolate, pumpkin, potato, whatever.


Then we won't have to hear about it going down their leg, just their chin. 

Visual_Cortex
Visual_Cortex

@JohnnyReb

let's change to the pie theory.

Oh yes, let's. I'll quote an authority in the field.

http://politicalhumor.about.com/library/jokes/bljokebushpiehigher.htm


Make the Pie Higher

I think we all agree, the past is over.
This is still a dangerous world.
It's a world of madmen
And uncertainty
And potential mental losses.

Rarely is the question asked
Is our children learning?
Will the highways of the internet
Become more few?
How many hands have I shaked?

They misunderestimate me.
I am a pitbull on the pantleg of opportunity.
I know that the human being and the fish
Can coexist.

Families is where our nation finds hope
Where our wings take dream.
Put food on your family!
Knock down the tollbooth!
Vulcanize society!
Make the pie higher!
Make the pie higher!

consumedconsumer
consumedconsumer

@JohnnyReb stop letting a handful horde the pie and your trickle down might actually work. greed kills the goose that lays the golden eggs. without consumers with jingle jangle, the system will collapse under its own weight. it's not all that complicated. and calling folks moochers all day long doesn't change these simple facts..

JohnnyReb
JohnnyReb

Even with the well established need for adding and maintaining Georgia roads, before the people agree to a tax increase on gasoline they should demand to see where the money goes.


Revenues from gas sales have gone into the general fund for years.  Why not tighten the general fund, do away with waste, reduce welfare payments, and see if some of the general fund can't be transferred to transportation?


Libs believe better transportation will bring more tax revenue.  Isn't that dynamic scoring?

Visual_Cortex
Visual_Cortex

@Paul42 @JohnnyReb

Don't you love this apparent assumption on so many among the right, that somehow the Departments of Transportation in the US (both state and Federal) are run and financed by complete imbeciles who never bothered to figure out where the money came from?

Numbers_R_Us
Numbers_R_Us

@JohnnyReb You should take up your concerns with the Georgia Republicans in charge.  After all, you probably voted for them because they promised to not raise your taxes yet here they are proposing big tax hikes.

Numbers_R_Us
Numbers_R_Us

So.  Did any of our esteemed Republican bloggers ever post their estimate of when the 99% in Kansas can expect to start seeing something other than the yellow trickle down resulting from Brownback and Co's tax cuts for the one percent.

Numbers_R_Us
Numbers_R_Us

@JohnnyReb @Numbers_R_Us I'm not the fool/tool that is promoting the notion of economic prosperity for all any minute/hour/day/week/month/year/decade now as a result of tax cuts for the wealthiest.  So.  Tell us what you got.  How long before the 99% in Kansas experience some of that Laffer economic prosperity.

DawgDadII
DawgDadII

Now the science on trickle-down economics is settled and Kansas is the evidence???

Paul42
Paul42

@DawgDadII

Science?  Well, just as with climate change evidence showing that, yes, when one traps heat in a system the temperature actually changes, conservatives will reject science (evidence) and cling to what they want to believe.  So we can expect to see all kinds of dynamic scoring support in the Republican Congress.

Yes_Jesus_Can
Yes_Jesus_Can

"Dynamic scoring" = Radio communication from an airline pilot: "Hey, y'all. I'm gonna turn off this altimeter because I got no visibility..." "...no, don't worry about the landing. I'm guessing we're a few hundred feet from the ground just now..." "Fuel? Probably still got a little. I turned off those gauges awhile back..." "Hey, that's not fair. I survived the last time I crashed, didn't I?"

-------------------------

Ridiculous little satire above, especially given that static scoring on things like say, obamacare were so off, the analogy wouldn't be accurate to say "a few hundred feet," but crashing into satellites and being burned by cosmic rays. 

Yes_Jesus_Can
Yes_Jesus_Can

Visual cortex,   

Do you honestly believe that most Western Europeans in the third quintile of wealth or income would swap places with their third-quintile American counterparts?

I doubt you'd get more than a few percentage points' worth taking that offer.

(not that I imagine that you care how people actually perceive their own quality of life.)

------------------------------------------

Whatever quartile, quintile or heptile, immigration is going from Europe to here still far more so than the other way around.  You're trying to put too fine an edge on it, and your point is just absurd.  It seems actually that you don't care how people are moving and are thus deaf to the reality of how they perceive their lives.

Where is this big migration from US to Germany, Switzerland, Sweden or France?  Huh? 

Visual_Cortex
Visual_Cortex

@Yes_Jesus_Can

Two things:

1. Cites would be nice.

2. An appreciation for the respective nations' immigration policies, quotas, etc., would be a prerequisite for using immigration as a metric.


straker
straker

jaysbehind - "loony libs are jumping for joy this morning. Gas prices are beginning to rise"


WHO told you that? Rush? Glen?


I don't know anyone who is happy to see gas prices rise.

jaysbehind
jaysbehind

@straker But but but in the name of global warming, cooling, disruption!!!!


You people...

jaysbehind
jaysbehind

Loony libs are jumping for joy this morning. Gas prices are beginning to rise...


You people...

jaysbehind
jaysbehind

@consumedconsumer @jaysbehind By the way since you're obviously to dense to realize it the price of gas has nothing to do with tax. Its taxed by the gallon...


You ignorant people...

Visual_Cortex
Visual_Cortex

I see LBB -- alone among others of the "we have a spending problem" ilk -- actually gave me an answer below, kind of.

We spend something like 4% on defense, which should be the main thing that the federal government handles. Everything else should be no more than another 4% or so.

So that's 8%, of GDP, total government spending, I guess.

Real Americans are embarrassed that the government has grown far beyond this level.

Here is a list of what countries actually spend--re-linked for I think the fifth time now?

http://en.wikipedia.org/wiki/Government_spending#As_a_percentage_of_GDP

Not one is remotely close to that 8% figure. The lowest appears to be Madagascar, at double that.

(The lowest among Western Europe is Switzerland, at 33.8%. Germany--a more realistic like:like sort of country to compare--is at 45.4.)

LilBarryBailout
LilBarryBailout

@Visual_Cortex

And that goes a long way to explaining Europe's slower growth, higher unemployment, and almost complete inability to defend themselves.

More for government = Less for people

Visual_Cortex
Visual_Cortex

@LilBarryBailout @Visual_Cortex

Less for people

Do you honestly believe that most Western Europeans in the third quintile of wealth or income would swap places with their third-quintile American counterparts?

I doubt you'd get more than a few percentage points' worth taking that offer.

(not that I imagine that you care how people actually perceive their own quality of life.)

Yes_Jesus_Can
Yes_Jesus_Can

@Visual_Cortex 

What interests me, VC is your appraisal of Germany as "a more realistic like: like sort of country to compare". 

The Germans do many things well, and they do many things that Americans should not model after, such as the onerous tax laws they used to have prior to Frau Merkel.  It used to be said that 90% of the words making up all the tax laws in the world were in Germany.  What did we get out of that?  The Sixth sense was a pretty good movie. 

If you ask me, the issue isn't percentage of GDP but top tax rates.  Enclosed you will find the problem.  In the US, the combined rate for high earners in some states is tops in the world, 56%, which is 11 percent higher than the max combined in Germany, and one percent lower than socialist Sweden. 

http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Paul42
Paul42

@Visual_Cortex

That's typical LBB analysis.  One factor (usually the bright, shiny one that's just captured his attention) is the 'one' that explains all.

Visual_Cortex
Visual_Cortex

@Yes_Jesus_Can @Visual_Cortex

"a more realistic like: like sort of country to compare". 

Well, it's more realistic than the two countries that came closer to the ridiculous percentage LBB proposed. are you just going to blow off that part?

hamiltonAZ
hamiltonAZ

"Dynamic scoring" = Radio communication from an airline pilot: "Hey, y'all. I'm gonna turn off this altimeter because I got no visibility..." "...no, don't worry about the landing. I'm guessing we're a few hundred feet from the ground just now..." "Fuel? Probably still got a little. I turned off those gauges awhile back..." "Hey, that's not fair. I survived the last time I crashed, didn't I?"

hamiltonAZ
hamiltonAZ

No need. As applied to the budget with the assumptions, Dr. Price will make, it's about as sensible as the pilot in the blind.

consumedconsumer
consumedconsumer

@LilBarryBailout more accurately? hardly. just gets them to where they want to be on the score. smoke and mirrors. just like trickle down. and you love it.

Paul42
Paul42

@hamiltonAZ

It's evident, reading this exchange, you know that  Jay discussed dynamic scoring in his very first paragraph as it pertains to Rep Price.  The fact LBB thought anyone would have to 'google it" to find out its meaning in this context shows, once again, he never read Jay's lead before posting.

JohnnyReb
JohnnyReb

There's a piece on National Review On Line about the Reverend Al's tax problems.  Seems every for profit business he has started either owes taxes or was shut down by the state for lack of tax payments.  And, he can't keep the "for profit" and "non profit" from intermingling.  How convenient.


The reverend has obviously parlayed his race baiting into political fear as anyone else would be in jail, not showing their shriveled mug on TV each night and being allowed to travel the country stirring up hate and discontent.


When the black community sends Sharpton into gagged retirement they will have taken a giant leap forward in solving race relations.

fatleo
fatleo

@JohnnyReb I'm white.  I like the guy.  He can keep poking with that stick till the moon turns blue or you quit hating black people - which is likely not to happen anytime soon.

JohnnyReb
JohnnyReb

People who give things away like money, food/SNAP, disability checks, etc. are very popular, especially with takers.


Producers don't think much of him, especially since what he gives away came from them.


He also does not know where to draw the line on give aways as he has given away all the blood and treasure spent in Iraq and soon Afghanistan.