A recent New York Times column by Paul Krugman titled “Charlatans, Cranks and Kansas” is a scolding diatribe about Kansas tax reform that’s loaded with politic opinions but devoid of economics.

 

Krugman takes the position that tax reform is a failure because Kansas is not experiencing the type of economic activity that Governor Brownback said would happen.  That type of logic is commonplace in politics but is merely a non sequitur (a statement that does not follow logically from or is not clearly related to anything previously said, according to Merriam-Webster).  The problem is one of over-promising early returns.  It is far too early to judge the impact of tax reform on the Kansas economy, and an errant ‘promise’ has no relationship to whether tax reform ‘works.’

It is fair to criticize Governor Brownback for positioning tax reform as “a shot of adrenalin,” as that implies a very immediate and pronounced change.  Tax reform will have a positive economic effect on Kansas but it will take several years to unfold, especially considering what is happening in the national economy and the ground to be made up.  The superior economic performance of states with lower tax burdens, however, is well-documented.

The disparate performance of low-burden / high-burden and states that do or do not tax income skews the national average and creates an artificially high target for trailing states such as Kansas.  It is more realistic to compare Kansas to its peer group of income-taxing states or high state-and-local tax burden states; once those groups are passed, the national average and low-burden states become the target.

Krugman also failed to mention that Kansas trailing the national economy is a long-standing situation; indeed, it was a driving force behind tax reform.  Private sector GDP grew 61.1% between 1998 and 2008 nationwide but only 55.6% in Kansas.  Private sector jobs increased by 7.9% nationwide but only by 5.3% in Kansas.  State with low tax burdens had net gains in domestic migration; states with high tax burdens (including Kansas) lost population due to domestic migration.

If trailing the national average defines failure, Krugman should have excoriated the tax-and-spend policies of Bill Graves, Kathleen Sebelius and Mark Parkinson.  Indeed, he could even make the case that Brownback’s policies are better because his national-average comparisons are somewhat better.  Krugman isn’t making intellectually honest arguments; he’s trying to justify his opinion that low taxes are bad.

The root problem in Kansas…today and in at least the past fifteen years…is that the majority of legislators in both parties and every governor have not had the courage to force government to operate efficiently.  One cannot reduce taxes without also making appropriate spending adjustments…not by cutting services, but by employing a Better Service, Better Price mentality.

Dave Trabert is president of Kansas Policy Institute. He is a frequent speaker to business, legislative and civic groups and also does research and writes on fiscal policy and education issues.