Kansas: An Unsung Hero For Economic Growth

[SirLinksALot]

SOURCE: Forbes

URL: http://www.forbes.com/sites/rexsinquefield/2016/07/18/kansas-an-unsung-hero-for-economic-growth/#ca4d8b65992f

by: Rex Sinquefield


During this news cycle, the Midwestern governor occupying the greatest media bandwidth is the one just selected for a spot on the GOP ticket. We can certainly expect to see Indiana Governor Mike Pence’s name all over the news for the next four months, but it’s also worth taking a look at how other Midwestern governors are making a real impact, and at the state level.

Now in the third year of his bold tax experiment, Kansas Governor Sam Brownback can see the ways in which reducing (and, in many cases, eliminating) the state income tax is yielding incremental, positive effects for Kansans.

Significantly, every year since the tax cuts were implemented, Kansas has surpassed the state record for new business formations. When we consider that startups have decreased nationwide since the Great Recession of 2008, this achievement is particularly remarkable. What’s more, the Kansas unemployment rate stands at 3.7% – the lowest the state has seen since 2001, and well below the national average of 5.5%.

Why the incremental success in Kansas? We certainly can’t attribute these victories to the state’s core industries; due to economic turmoil felt nationwide, Kansas too has seen dips in farm incomes (owing to consistently low crop prices and steep declines in cattle prices), a fall in commodity prices and exports, sluggish movement in oil and natural-gas markets, and declining manufacturing. Without these four industries buoying Kansas’ economy, we must look to other factors: namely, the income tax cut that continues to make a real difference, particularly for small businesses and working families.

Governor Brownback put his faith in the private sector to grow the Kansas economy, rather than the government. By eliminating the income tax for small business, the Brownback administration effectively put money back in families’ pockets and provided promising new businesses with an environment primed for growth. Following the major tax reform in 2013, individual income taxes for individuals, families and small business went down by 30% on average. Seventy-one percent of the savings went to individuals and families, who could then save or spend as they chose. Twenty-nine percent of the savings went to small businesses, allowing them to make larger investments in equipment, space and staff.

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[TomSea]

Well done to the Sunflower state, that 3.3% is certainly not a universal rate around the state, Salina is at 4.3, so still much better than the national rate. Kansas, very American. One can call it Midwestern but it is a very close call as to what region it is really.

[SirLinksALot]

Well done to the Sunflower state, that 3.3% is certainly not a universal rate around the state, Salina is at 4.3, so still much better than the national rate. Kansas, very American. One can call it Midwestern but it is a very close call as to what region it is really.

Question, how popular (or unpopular) is Gov. Brownback?

[The_Reader_David]

Question, how popular (or unpopular) is Gov. Brownback?

Fairly unpopular, thanks mostly to the misattribution of the state government's budget problems to the tax cuts that spurred the business growth documented in the article, when, in fact, they are due to the Kansas Supreme Court arrogating to itself the power to make political decisions -- in the case in point what constitutes adequate funding for K-12 education.