New That Didn’t Happen – But Might
Mr. Brownback has boasted that his state is set to go head-to-head with Texas, which has neither a personal nor corporate income tax, in luring new businesses and residents.
This policy is bound to fail, since
State – Expects Over 20 New Jobs From
Program That Costs $1.2 Billion
“It is clear we needed to think outside the box” said Gov. Sam Brownback, “and we determined that if we just diverted tax revenue from low and middle income taxpayers to millionaires we would have the magic to stimulate our economy. And it’s also the right thing to do” the Governor added.
Several years ago
Kansas enacted huge tax reduction for high
income tax payers, but the resultant reduction in state services like
education, transportation and law enforcement created negative incentives for
businesses to relocate the Kansas. As the supply of trained workers declined and
the crime rate rose many businesses moved from Kansas, creating high unemployment. Only the denial of subsidized food and health
care to those newly unemployed allowed Kansas
to keep taxes low.
Economists at the Heritage Foundation and the American Enterprise Institute did research and concluded that
had failed because it did not go far enough.
The studies said that Kansas
need to provide a negative income tax of at least $100,000 per person for those
making more than $1 million a year, and that if such a payment was funded by
increasing taxes on food the state could easily afford the program. The higher prices for food would result in “no
more than 11% of the children in the state suffering from malnutrition” one
While the announcement of the program has not resulted in a single millionaire moving to
Kansas or investing in
the state, Gov. Brownback and his supporters said that any lack of economic
benefit paled by the huge benefit that the state would get from being known as
the “Capital of Conservatism”.