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So how goes the Great Kansas Supply-Side Tax Cut Experiment? It has been much criticized by liberals and the national media over the past three years. In the new National Review, Henry Olson also argues the growth impact of the tax cuts — the top personal income tax rate was reduced to 4.9% from 6.45% and eliminated for small business owners who file as individuals — has been iffy at best, the deficit impact great: “Fiscally, Kansas’s supply-side experiment has been lots of pain with little or no gain.” (Olsen prefers the more middle-class-centric approach of Governor Scott Walker in Wisconsin.)
But over the weekend, the Wall Street Journal published a note from Andrew Wilson of the St. Louis-based Show-Me Institute that presented a differed take. While Kansas Governor Sam Brownback said the state’s “new pro-growth tax policy” would be “like a shot of adrenaline into the heart of the Kansas economy,” Wilson offers a positive, though subdued, conclusion, “… if Kansas hasn’t exactly catapulted into the front ranks in economic growth and employment, then it has at least moved a long way from the stagnation of recent decades.”
He points out, for instance, that from 1998-2012, “Kansas ranked 38th in private-sector job growth, according to Bureau of Labor Statistics data crunched by the Kansas Policy Institute. In 2013 — the first year after the tax reform — the state climbed to 27th place, and in 2014 it moved to 21st, placing it in the top half of states.” Also: “In the second half of 2014, hourly wages in Kansas grew 3.5%, according to BLS data, far faster than the national average of 1.9%.”