As reported in this paper on Aug. 24, Rep. Lynn Jenkins claims that the U.S. House tax reform bill should not be compared to the disastrous tax plan championed by Gov. Sam Brownback. The Republican bill would only reduce tax rates, not eliminate them (as Brownback did with LLCs). Presumably, this means tax revenues will not fall as much as they did in Kansas. But Jenkins does not understand how the Brownback plan was supposed to work.
The Brownback plan was an experiment, deemed so by him and other Republicans, to demonstrate that cutting taxes would stimulate the economy. As a corollary, that high growth would generate increased tax revenues. But that can’t happen if the tax cuts don’t stimulate the economy, which is what happened with the Brownback experiment.
The Brownback plan cut taxes by a lot, which was supposed to provide enormous incentives for Kansas businesses to create jobs and stimulate the economy. But as we all know, this economic growth never materialized. It was so bad that, as the experiment was failing, the U.S. economy, which Jenkins and other Republicans constantly complained was being held back by Obama’s failed policies, grew steadily year after year.
The key component of the Republicans’ so-called tax reform bill is its tax breaks for corporations and the very wealthy – exactly what was in Brownback’s plan. The cuts, as Jenkins says, will not be as large as those engineered by Brownback. Yet Republicans are promising the same thing – that these “reforms” will create economic growth. But if the huge tax breaks for the wealthy in Kansas provided no stimulus to the state’s economy, how can smaller tax cuts stimulate the nation’s economy?
TOM WEISS, Lawrence