Today’s Lawrence Journal-World had another ‘sky-will-fall’ story warning of economic catastrophe that would accompany tax reform in Kansas. “Study says lower state income taxes will lead to higher property, sales taxes
” is based on a ‘study’ by the Center for Budget and Policy Priorities (CBPP) based in Washington, DC.
New York Times reporter Matt Bai says the Center for Budget and Policy Priorities (CBPP) is funded by the Democracy Alliance. According to Bai's account, representatives of CBPP attended a May 2006 meeting of the Democracy Alliance to "talk about the agendas they were busy crafting that would catapult Democratic politics into the economic future."
It's quite telling that the left-leaning Lawrence Journal-World calls this organization 'non-partisan' but consistently labels free market- oriented organizations as 'conservative'.
The CBPP study's conclusion is based on nothing more than an assumption: "the state will likely find itself both raising other taxes on middle- and low-income families and making massive cuts to vital services that will badly damage the state’s economy."
This is the classic 'either/or' ultimatum that governments typically give taxpayers...either pay higher taxes or surrender some service you want. In other words, give us what we want or pay the price. Instead, governments should examine every program for effectiveness and efficiency, always looking for ways to maintain essential services at the most cost-effective manner. States with lower tax burdens have far greater job growth and wage & salary disbursements; their private sector GDP dwarfs high burden states. They gain population from people choosing to move from other states while the high burden states (including Kansas) lose population from domestic migration.
The key to having a low tax burden is to control spending, and that's exactly what low burden states and those with no income tax do. According to the National Association of State Budget Officers, states with no income tax spent $2,444 per resident in 2010 while the rest of the country averaged $3,572 or 46% more. Kansas spent $3,216 per resident and would have saved $2.2 billion by spending at the rate of states with no income tax.
Tax reform is about job creation and economic growth. The CBPP 'study' is about justifying the continuation of policies that have fed the growth of government and largely contributed to sub-standard private sector economic growth.