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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: 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.

    --
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  • (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.