Kansas officials yesterday announced that state revenue dropped more than expected again in June, adding even more to the damage we previously documented from the tax cuts that Kansas put in place last year. All told, Kansas brought in $338 million less than it expected in fiscal year 2014, which ended yesterday for the state.
Kansas policymakers should have seen this coming when they enacted the tax cuts. For one thing, as we wrote at the time, the package included an especially wasteful provision: eliminating taxes on profits passed through from businesses to their owners, an idea that has been widely panned, most recently by the New York Times’Josh Barro.
The latest news also draws further attention to the damage that economist Arthur Laffer and his employer, the American Legislative Exchange Council (ALEC), are doing to states. Laffer was the architect of Kansas’ plan, and ALEC continues to push for similarly damaging tax cuts in other states ― as Paul Krugman and my colleague Jared Bernstein recently pointed out.
Kansas’ disappointing 2014 revenue results provide another piece of evidence that should give pause to other states considering similar ALEC-backed tax cut plans.