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Setting the Record Straight on Kansas

April 24, 2014 at 2:05 PM

Rex Sinquefield — who funds campaigns for drastic tax cuts in Missouri — claims that our recent paper about the budgetary and economic impact of Kansas’ recent tax cuts was “patently false” and offers information that he says we “chose to ignore or distort.”

In his piece for Forbes, however, Sinquefield doesn’t back up his “patently false” claim by challenging any of the data we provide.  But three of the points of information he thinks we ignored are worth reviewing, because they are misleading, inaccurate, and often repeated by tax cut enthusiasts.

First, Sinquefield offers data that appear to show that states without personal income taxes outperformed states with relatively high income taxes between 2001 and 2011.  He doesn’t adjust for factors other than taxes that might account for these findings.  Instead, he simply asserts that taxes are the cause.  In fact, some of the no-income-tax states experienced relatively strong population growth over that period for reasons that have nothing to do with taxes (and much more to do with low housing prices, climate, and birth rates).  If one adjusts merely for population, by comparing how these states performed per capita, the relationship Sinquefield claims goes away.

Second, rather than challenge our point that per-pupil funding for Kansas schools continues to fall, Sinquefield asserts that there is “no proof that the quality of education improves with more spending” — as if Kansas, where general school aid per pupil is down 16 percent since 2008, can continue to cut school funding indefinitely with no consequences for students.  To the contrary, the evidence indicates that deep cuts in school spending harm student outcomes.

Third, Sinquefield points to a “dynamic” model of Kansas’ tax cuts that finds the tax cuts will boost jobs, business investment, and disposable income.  The model he cites is not well-known and has been disparaged by academic economists and others who have tried to understand its methodology.  It appears designed to predetermine its results by over-valuing the economic benefits of cutting taxes, and greatly under-valuing the economic costs of reducing state spending (laying off school workers and other public employees, discontinuing contracts with private sector vendors, and other actions that counteract the economic value of tax cuts).

Sinquefield is right about one thing:  we did ignore the information he offers, as should anyone who cares about a serious policy debate.

(A final note:  Sinquefield mentions that CBPP has received funding from George Soros.  CBPP is supported primarily by a wide range of foundation grants.  The full list of our supporting organizations can be found here.)


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