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posted by n1 on Thursday June 08 2017, @08:17AM   Printer-friendly
from the other-people's-money dept.

The Republican-controlled house and senates of Kansas voted to increase taxes and to override the governor's veto of a bill to increase taxes.

The current governor pushed through tax cuts, intended to grow Kansas' economy, but during the tax cuts, Kansas' growth was lower than the country's overall growth.

The increase follows years in which the state was unable to balance its budget, and the funding for education was found to be unconstitutionally low.

In my view, state budgets are likely to take a hit from Trump's stealth tax increase: by reducing funding for programs and forcing the states to step in, the states will have to find extra money to fill the gaps.


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  • (Score: 4, Insightful) by The Mighty Buzzard on Thursday June 08 2017, @09:47AM (17 children)

    Welcome to U.S. politics. A kid in gradeschool could tell you that cutting your income without cutting your spending isn't going to work out well in the short term. Over the moderate term it could very well increase revenue if targeted properly but it's not going to be immediate.

    You're also supposed to cut luxuries when your budget shrinks, not the payments on the car that you depend on to get you to work on time.

    --
    My rights don't end where your fear begins.
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  • (Score: 2, Insightful) by Anonymous Coward on Thursday June 08 2017, @01:04PM

    by Anonymous Coward on Thursday June 08 2017, @01:04PM (#522562)

    That is so, but a slimmed-down pig doesn't put bacon on a politician's table. Reelection out-weighs sound management every time.

  • (Score: 2) by Grishnakh on Thursday June 08 2017, @01:29PM (4 children)

    by Grishnakh (2831) on Thursday June 08 2017, @01:29PM (#522574)

    A kid in gradeschool could tell you that cutting your income without cutting your spending isn't going to work out well in the short term.

    Sure, a kid in grade school could tell you this, but average Americans simply can't understand it, nor many politicians.

    With the way Americans and their politicians manage money, it's really a wonder this country isn't completely bankrupt by now.

    • (Score: 2) by tangomargarine on Thursday June 08 2017, @02:49PM (3 children)

      by tangomargarine (667) on Thursday June 08 2017, @02:49PM (#522599)

      From a quick search it looks like the national debt is around GDP anyway, so one could argue we're already bankrupt...

      --
      "Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
      • (Score: 1, Insightful) by Anonymous Coward on Thursday June 08 2017, @06:52PM (2 children)

        by Anonymous Coward on Thursday June 08 2017, @06:52PM (#522737)

        Doesn't matter that much as long as:
        1) The debts are in a currency the USA can create
        2) Most other countries continue to use that same currency to trade and hold large amounts of it.

        e.g. it doesn't matter as long as the USA can be a Mugabe and the rest of the world lives in the USA's Zimbabwe. The USA prints money (aka Quantitative Easing etc) and everyone else with/owed US dollars gets poorer.

        Not the same as you owing the bank in currency you can't create or control.

        The real problem for the average US citizen is less and less of the USA's created money is going to help them and more of it is going to help others.

        By the way where does the DoD get those trillions from and where is it really going: http://www.reuters.com/article/us-usa-audit-army-idUSKCN10U1IG [reuters.com]

        6.5 trillion per year... For comparison the total US household debt is about 13 trillion.

        • (Score: 3, Informative) by AthanasiusKircher on Thursday June 08 2017, @09:00PM

          by AthanasiusKircher (5291) on Thursday June 08 2017, @09:00PM (#522787) Journal

          Doesn't matter that much as long as:
          1) The debts are in a currency the USA can create
          2) Most other countries continue to use that same currency to trade and hold large amounts of it.

          This is insightful, but it's important to note it only applies to governments that control their own sovereign debt. It doesn't, for example, apply to Kansas, which could actually go bankrupt in a meaningful way, because Kansas doesn't control the creation of dollars.

        • (Score: 1) by khallow on Friday June 09 2017, @11:55AM

          by khallow (3766) Subscriber Badge on Friday June 09 2017, @11:55AM (#523011) Journal

          2) Most other countries continue to use that same currency to trade and hold large amounts of it.

          If the US massively inflates its currency, 2) stops happening. So the US is significantly limited to what money creation it can do (basically what the export-oriented countries like China and Japan are willing to sop up).

          6.5 trillion per year...

          No, that's over the life of the military service. I'm sure the accountants gave up after a few decades, but it's not all generated in a single year else we would have far more epic problems. Further, this is just typical government accounting (and probably done in large part to hide funding to intelligence projects throughout the government, hence, unlikely to ever stop). There is no branch of the US government that would do better and the entitlement programs hide worse problems IMHO.

  • (Score: 4, Informative) by Whoever on Thursday June 08 2017, @03:46PM (4 children)

    by Whoever (4524) on Thursday June 08 2017, @03:46PM (#522632) Journal

    Is there evidence that it works in the medium term, or is that just an excuse for the failure? Note that the tax cuts were initially implemented sufficiently long ago that medium term effects should be starting to show by now.

    But let's take a simple view: no one wants to live in a state that can't provide education for their kids because the state can't pay its teachers.

    Question: what do you call someone who wants to run a budget in such a way that you can't pay your essential bills? Answer: a Republican Governor.

    Seriously, here we have a concrete example that tax cuts don't work in the way claimed by Republicans and what is the response from the right-wing posters here? Either crickets, mental gymnastics or lame attempts to deny the facts.

    • (Score: 0) by Anonymous Coward on Thursday June 08 2017, @05:50PM

      by Anonymous Coward on Thursday June 08 2017, @05:50PM (#522702)

      Depends on the state in which you are. Over in Washington, they're called Democrats. (Hi, Christine!)

    • (Score: 2, Insightful) by The Mighty Buzzard on Friday June 09 2017, @12:24AM (2 children)

      You also have the 80s and the 90s showing that they can in fact help quite a lot. Really though our entire tax system needs scrapped and rewritten from the ground up. Preferably without relying on theft which is all involuntary taxation is.

      --
      My rights don't end where your fear begins.
      • (Score: 0) by Anonymous Coward on Friday June 09 2017, @10:39PM (1 child)

        by Anonymous Coward on Friday June 09 2017, @10:39PM (#523311)

        Preferably without relying on theft which is all involuntary taxation is.

        You actually believe a country will function, in a positive way for it's citizens, based on running it with 'voluntary' taxes? That's awesome, but I'll bite. Can you cite an example of a society that does that and which you would like the US to emulate?

        • (Score: 2) by The Mighty Buzzard on Saturday June 10 2017, @10:22AM

          Well from personal experience I'm rather fond of the Chickasaw Nation's approach. They rake in enough through gambling and assorted investments that it pays for the whole tribe's healthcare entirely, quite a lot of municipal and county improvements for the areas we operate in, and a good deal more to boot.

          Of course that would require quite a lot of rewriting to scale to the entire national population but I'm confident it could be done and cover governments actual essential jobs, though I utterly fail to care if it could keep up the entitlement spending which makes up the majority of our budget every year. Being my daddy is not an essential, or even desirable, government function.

          --
          My rights don't end where your fear begins.
  • (Score: 2) by Thexalon on Thursday June 08 2017, @03:47PM (5 children)

    by Thexalon (636) on Thursday June 08 2017, @03:47PM (#522633)

    Over the moderate term it could very well increase revenue if targeted properly but it's not going to be immediate.

    Yeah, about that: Ever since Arthur Laffer drew that totally speculative graph on a napkin, governments have been telling us that. And not once has it worked out.

    And why should it? Imagine, if you will:
    - Company A, which is selling an extremely popular product with revenue growing at 50% and the market far from maxed out, subject to a 20% tax.
    - Company B, which is selling an OK product, with revenue growing at 5%, with no tax.
    Which would you be happier to invest in? Investment follows demand more than it follows tax breaks. The tax breaks are for the benefit of the people who invested in Company A and would have invested in Company A over Company B any day of the week, but would rather get a 50% return than a 40% return.

    --
    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
    • (Score: 3, Interesting) by Anonymous Coward on Thursday June 08 2017, @05:58PM (1 child)

      by Anonymous Coward on Thursday June 08 2017, @05:58PM (#522706)

      It has been reported repeatedly that the Laffer curve actually does have an effect when you start at a marginal tax rate of 90 percent. [google.com]

      In the years since JFK, however, the feedback loop on the economy from tax cuts has been weak.
      Those have served to empower the already-rich (giving us an ever less democratic government) while harming the actual economy (ordinary folks buying ordinary stuff).

      If a tax cut doesn't have strong strings attached (must actually create jobs), the claimed advantage doesn't appear.

      -- OriginalOwner_ [soylentnews.org]

      • (Score: 1) by khallow on Friday June 09 2017, @03:27AM

        by khallow (3766) Subscriber Badge on Friday June 09 2017, @03:27AM (#522926) Journal

        It has been reported repeatedly that the Laffer curve actually does have an effect when you start at a marginal tax rate of 90 percent.

        And we should believe those reports why? I'll note there seems to be better evidence for the current highest tax bracket of 40% being closer to the actual peak, though still on the high side. Further, it bears repeating that Laffer curve is not a magic invariant. It depends on many factors, such as what the taxes are paying for. For example, the usual approach of taxing people and dumping it into worthless or even negative value things generates a Laffer curve with a much lower peak than where that tax money is used to generate paradise. The US is notorious for being very wasteful and even destructive (such as the recent war in Iraq) with tax revenue. That real world depression of the Laffer curve peak isn't going to be revealed in fantastical studies which conclude the outcome that is desired.

    • (Score: 1) by khallow on Friday June 09 2017, @11:25AM (2 children)

      by khallow (3766) Subscriber Badge on Friday June 09 2017, @11:25AM (#523006) Journal

      The tax breaks are for the benefit of the people who invested in Company A and would have invested in Company A over Company B any day of the week, but would rather get a 50% return than a 40% return.

      And the rent seekers and cronies that the taxes are collected for would rather have the money than a lower tax rate. There's plenty of conflicts of interest here. It's not just wealthy investors who get screwed by high taxes.

      • (Score: 3, Insightful) by Thexalon on Friday June 09 2017, @12:49PM (1 child)

        by Thexalon (636) on Friday June 09 2017, @12:49PM (#523018)

        Yes, yes, all taxes are evil, we get it.

        That carefully ignores my point, which is that the governments' ability to change investors' minds about where to put their money is far smaller than other factors like customer demand for the product and how efficient the company is at producing said product.

        --
        The only thing that stops a bad guy with a compiler is a good guy with a compiler.
        • (Score: 1) by khallow on Friday June 09 2017, @06:02PM

          by khallow (3766) Subscriber Badge on Friday June 09 2017, @06:02PM (#523180) Journal

          That carefully ignores my point, which is that the governments' ability to change investors' minds about where to put their money is far smaller than other factors like customer demand for the product and how efficient the company is at producing said product.

          That still means it is a big factor even if there are larger factors out there. And taking 20% of investors' profits in the above example, means they have 20% less to invest elsewhere, including the consequences such as creating more jobs and more things of value. The opportunity costs of taxes are routinely ignored.