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Archive for Thursday, January 19, 2012

Consultant Laffer praises Brownback’s tax plan

January 19, 2012, 12:43 p.m. Updated January 19, 2012, 4:49 p.m.

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— Gov. Sam Brownback’s proposal to increase taxes on poor Kansans will help them in the long run because the plan will produce jobs and improve the state economy, nationally known low-tax advocate Arthur Laffer said Thursday.

Consultant Arthur Laffer enters legislative committee room on Thursday to tout Gov. Sam Brownback's tax plan. Behind Laffer is Kansas Department of Revenue Secretary Nick Jordan. Laffer is being paid $75,000 by the Brownback administration to help with the tax proposal.

Consultant Arthur Laffer enters legislative committee room on Thursday to tout Gov. Sam Brownback's tax plan. Behind Laffer is Kansas Department of Revenue Secretary Nick Jordan. Laffer is being paid $75,000 by the Brownback administration to help with the tax proposal.

Laffer, who is being paid $75,000 by the Brownback administration for consulting work on the governor’s tax plan, was questioned during his presentation about Brownback’s proposal to end the state portion of the Earned Income Tax Credit, which helps low-income working Kansans.

Kari Ann Rinker, state coordinator for the National Organization for Women, said removing the EITC would hurt many single parents.

But Laffer said the funds saved from removing the EITC would be plowed back into programs to help low-income people.

Laffer said he understood the plight of single parents because he said he was one when his first wife left him with four children.

Rinker shot back, “You just got paid $75,000 for one consulting job. I don’t think you understand.”

Later, Laffer, considered the father of supply-side economics, was asked how Brownback’s plan could be described as fair when it would cut state income taxes for Kansans making more than $25,000 but increase the taxes for those making under $25,000.

“I don’t think that’s the right way to look at that plan,” Laffer said. He said the primary beneficiaries of Brownback’s plan will be low-income Kansans because it will lure more businesses to the state and create jobs.

“It’s not a class warfare issue. It’s how you get to prosperity for everyone,” he said.

Brownback’s plan would reduce state income tax rates and eliminate income taxes for thousands of businesses. The plan would also eliminate numerous tax credits and deductions and keep in place the 6.3 percent state sales tax, which is scheduled to fall to 5.7 percent next year.

Under figures provided by the Kansas Department of Revenue, the group of Kansans with adjusted gross incomes of $25,000 or less currently receive a total tax refund of $1.7 million. Under Brownback’s plan, they would have to pay $86.5 million in taxes, which has been calculated as a 5,102 percent increase. All other income groups would see a tax cut with the largest percentage cut being 18.5 percent for people making $250,000 or more per year.

In speaking to legislators, Laffer, who runs a consulting company out of Nashville, Tenn., said the states making the most economic improvement are those without a state income tax, such as Texas, Florida and Nevada. Progressive income taxes have damaged many states, he argued.

But Sen. Tom Holland, the leading Democrat on the Senate Assessment and Taxation Committee, argued that Laffer’s premise was unfounded.

Texas, Florida and Nevada have other sources of revenue, such as oil and tourism, that Kansas doesn’t have, he said.

But Laffer said states such as Ohio and Michigan have suffered with state income taxes.

“I dare you to go to Detroit,” he said.

Willis Heck, a retired school superintendent from Newton, who is serving on a tax study group formed by Senate President Steve Morris, R-Hugoton, and attended Laffer’s briefing, said he was concerned about how Brownback’s plan will affect funding of “core functions of state government.”

He asked Laffer if Laffer had looked into that part of the plan, and Laffer said he hadn’t.

Laffer also responded to reports of a lawsuit filed in Texas that alleges he lent his name to a group that bilked investors out of $3.1 million in a Ponzi scheme.

Laffer said he was never served court papers in the lawsuit and that he has been sued many times. The Associated Press reported that the plaintiffs who filed the lawsuit have dropped it.

Comments

guess_again 2 years, 9 months ago

If tax cuts produce jobs, all the tax cuts which have occurred in DC and Topeka (since Reagan tripled the size of the US debt) would have us rolling in jobs right now.

Laffer was, and is, a laugher. Laughs come from jokes, which is what this hearing was.

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Orwell 2 years, 9 months ago

Laffer was the guy who drew a curve on a napkin to "prove" if you reduced the tax rate to zero, tax revenues would increase.

His "answer" to the undisputed transfer of wealth from the poor to the rich is that more tax money will allegedly go into programs for the benefit of the poor. I thought it was Republican orthodoxy that the people know better than the government how to spend their money, but apparently that only applies to rich people.

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deec 2 years, 9 months ago

Maybe one of those new programs will be sending millions of dollars to Johnson and Johnson via fraud, like Texas did: http://www.bbc.co.uk/news/world-us-canada-16641952

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Jeff Zamrzla 2 years, 9 months ago

No word on Laffer being sued? Why not? Is it not news worthy that a crony of slammin' Sammy is being sued for his involvement in a Ponzi Scheme. the link is http://www.bizjournals.com/nashville/news/2012/01/13/arthur-laffer-named-in-texas-ponzi-suit.html and it was news worthy in Nashville.

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overthemoon 2 years, 9 months ago

Laffer is disdained by most if not all of his former Reagan era colleagues. Why is Brownback paying this man money for bad information on economic models that have never proven successful?

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thebigspoon 2 years, 9 months ago

Because he is making an effort to appear that he is thinking of the good of the state. In essence, he uses Laffer and his discredited theories as fodder for his propaganda machine, whether the theories hold water or not, so he can blythely go on his way toward wrecking the ability of the lower income earners in Kansas to have a life. The same thing applies to his many attempts at appearing Christian in his thinking, when, in point of fact, the things he espouses are quite counter to any Christian teachings. The man is a fraud, he takes government dollars for his farm activities, but rejects dollars which would enrich life in Kansas. He espouses job creation, yet causes jobs to be lost in Kansas, and then hires frauds from out of state to do jobs or offer advice on how to continue his road to destructive policies. He endorses a Presidential candidate who hasn't a snowball's chance in Hell of winning, on the off chance that he mighrt be a vice-presidential candidate. The liost goes on and on, but nothing he has done has been for the good of the people, unless, of course, you count businesses as people. His outright lied during his campaign for election seem not to be important to him, but his good standing with the monied and influential is all important to him, to the detriment of ordinary folks in the state. It doesn't matter to him that his policies are destructive, but that he be the King of Kansas. He is contemptible, he answers no in-depth questions, and he continues to be a puppet of the largest and richest in the state and the nation.

The emperor has no clothes, and soon, the people are going to lose their blinders.

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overthemoon 2 years, 9 months ago

Thanks for your well thought out answer!! I might add that he's just like all of the other new GOP govs. Hmmm. How could THAT be??

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thebigspoon 2 years, 9 months ago

Thank you. Now, if only I could type................

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kansanbygrace 2 years, 9 months ago

This man's entire mythology has been demonstrated to be totally false. He gets paid, still, for proposing harebrained schemes that've not worked historically, and offers no suggestion as to what conditions have changed to make it work this time.

Maybe he intends well, but obviously knows very little.

I'd prefer dealing with people who have productive outcomes in their dossier, to sweeten their claims and abstract fabrications. To date, Mr. Laffer's hypotheses appear as nonsense.

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somedude20 2 years, 9 months ago

If Brownback was less of an idiot (and funny) he could be Gov. William J. Le Petomane and this Laffer cat seems sneaky like Hedley Lamarr. Kobach would be Taggert (trying to pull the old number 6 on us) All of the morons that voted for these slimballs are the slaves left to die in the quicksand but the (smart) ones who did not, well, we are The Waco Kid.

Your time is going to come........

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Bob Forer 2 years, 9 months ago

Candygram for Mongo.

Mongo like Candy.

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progressive_thinker 2 years, 9 months ago

"Laffer said the funds saved from removing the EITC would be plowed back into programs to help low-income people."

Is anyone out there really believing this?

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tolawdjk 2 years, 9 months ago

Bottom line, someone is going to have to go back and get a poopload of dimes.

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Jimo 2 years, 9 months ago

I suppose the article might have pointed out that Laffer hasn't published a theoretical article in an economics journal for over 3 decades, is a laughing-stock among economists, and is currently being sued over his involvement in a Ponzi scheme.

"...the states making the most economic improvement are those without a state income tax, such as Texas, Florida and Nevada."

Well, that and the predilection of people to live in warm climates after the wide-spread installation of air conditioning. Seriously: the most important factor for economic growth, given a choice between air conditioning and low income taxes? Air conditioning -- hands down.

Wyoming, Alaska, and South Dakota don't have income taxes either. All three are states that live off mineral extraction and government welfare. What did Laffer have to say about them?

Sorry, but low marginal tax rates encourage capital owners to take capital out of their business, destroying jobs and lowering long-term economic growth. Contrarily, high marginal tax rates penalize the draining of capital but favor reinvesting back into the business. It is no accident that the Golden Era of American economic growth came during a period with marginal tax rates several times higher than today.

The only consequential economic activity you'll see from cutting taxes on the wealthy while raising them on workers will be people taking the money and running ... away from Kansas. Who the heck wants to live in Kansas when you can liquidate your assets and move to Myrtle Beach, Maui, or Aruba?

Certainly not Brownback, who'll profit most handsomely from this self-interested tax proposal. Which island paradise do you suppose multi-millionaire Sam will pick for himself -- financed by the taxes he never paid -- while Joe Sixpack settles for scenic Hoxie or Ark City and the joys of discount catfood?

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Jimo 2 years, 9 months ago

Ha

Here's a pic of Brownback's future home, purchased with the taxes he won't have to pay anymore to the state treasury: http://2.bp.blogspot.com/_il8Um8Q4Eb8/Sgye0qNtpKI/AAAAAAAAGVI/T6TZ-c38LPo/s1600/caymanislands.jpg

Here's Joe Sixpack's after he starts paying higher sales and property taxes and fails to hop aboard the employment gravy train promised by the Snakeoil Duo of Brownback/Laffer: http://www.kgs.ku.edu/Publications/Photos/Wallace/WA-Mt-Sunflower.jpg

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verity 2 years, 9 months ago

I was all excited to see Brownback's new home (thought maybe we could persuade him to leave Kansas early), then I got Error 404. I hate it when I get Error 404.

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JustNoticed 2 years, 9 months ago

"It's not a class warfare issue," he said. The Biggest Lie.

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verity 2 years, 9 months ago

Does Laffer's excuses make sense in any state of the union---or state of consciousness?

And now they are admitting that taxes will be raised on the poor? When did that happen? Did I miss something? I have to go have a drink and lie down.

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pavlovs_dog 2 years, 9 months ago

News flash: Pope in favor of Catholosism.

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beatrice 2 years, 9 months ago

I think he might have just made himself a bonus.

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cowboy 2 years, 9 months ago

Kansas is on a race to the bottom but we are first on one list....we do have the least educated governor in the nation.

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pavlovs_dog 2 years, 9 months ago

GOP: Please draft Brownback for Pres. Get him out of Kansas. Thanks.

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Bob Forer 2 years, 9 months ago

If a guy paid me $75,000 for nothing, I would be praising him also.

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Ragingbear 2 years, 9 months ago

Hmm. Why would somebody being paid by Governor give his plan a thumbs up? What good would that do?

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Tony Kisner 2 years, 9 months ago

"Does anyone know what this is? It's the Laffer Curver. Does anyone know what President Bush called this? Voo Doo something?

Not sure I got that correct but it was a great line in the best movie ever. (At least at my house.)

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Bob Forer 2 years, 9 months ago

the first George called it voodoo economics.

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Bob Forer 2 years, 9 months ago

: In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.

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TinmanKC 2 years, 9 months ago

"Laffer said the funds saved from removing the EITC would be plowed back into programs to help low-income people." I thought the GOP line was that people should decide how to spend their own money rather than have programs to help them...

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billbodiggens 2 years, 9 months ago

The money saved will undoubtedly be used for even more State House renovation.

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billbodiggens 2 years, 9 months ago

Or to fund their own slick deal retirement programs.

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Bob Forer 2 years, 9 months ago

Rinker shot back, “You just got paid $75,000 for one consulting job. I don’t think you understand.”

Nice retort. You go, girl!

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Katara 2 years, 9 months ago

“I don’t think that’s the right way to look at that plan,” Laffer said.

He, then, turned the chart upside down and said, "There! It looks much better now! The people on top are the ones paying more."

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question4u 2 years, 9 months ago

"Laffer...was asked how Brownback’s plan could be described as fair..."

“'I don’t think that’s the right way to look at that plan,' Laffer said."

Laffer is correct. If you're describing the plan as fair, you're looking at it the wrong way.

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mloburgio 2 years, 9 months ago

Consultant Laffer praises Brownback’s tax plan

Sam Brownback's own administration acknowledges that under his tax plan, those who make $25K or less will experience a 5102% tax INCREASE, while those making $250K or more will enjoy an 18.5% tax cut. Does that sound fair to you?

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Jayhawk1958 2 years, 9 months ago

Yeah and I got a bottle of snake oil to sell you that cures everything. I've heard the "create jobs and grow the economy" lie before.

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mloburgio 2 years, 9 months ago

To compensate for these reductions in income taxes, the Governor’s plan eliminates itemized deductions (including home mortgage interest and charitable contributions). It eliminates incentives for 529 education savings programs and long-term care insurance premiums. It eliminates the refund for sales tax on food for low-income Kansans. I also understand it eliminates part of the Homestead property tax refund.

The plan also eliminates tax credits for: * Adoption * Alternative fuel tax * Assistive technology contribution * Child and dependent care * Child day care assistance * Community service contribution * Disabled access * Earned income (EITC) * Environmental compliance * Historic preservation * Individual development account * National Guard employer health insurance * Small employer health benefit plan * Temporary assistance to families contribution * and more.

It appears that this plan moves the tax burden from the richest Kansans to the middle class and poorest Kansans. For example, sales tax is the most regressive tax we have. Making the 1% sales tax increase permanent not only reneges on our promise to remove the sales tax increase, it puts a disproportionate burden on low-income families. Removing the refund for sales tax on food and the Earned Income Tax Credit is a double whammy for the poorest working Kansans. In fact, President Ronald Reagan once said the Earned Income Tax Credit was “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”

Eliminating the deduction for home mortgage discourages home purchases for the middle class. Cutting the upper marginal income tax rate benefits the richest Kansans the most. Low-income Kansans can buy a Big Mac with their income tax cut while the folks at the top can buy a yacht with theirs. Not only that, when the income tax is eliminated altogether, there will only be sales and property taxes left to pay the bills

Sam Brownback’s own administration acknowledges that under his tax plan, those who make $25K or less will experience a 5102% tax INCREASE, while those making $250K or more will enjoy an 18.5% tax cut. Does that sound fair to you?

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chootspa 2 years, 9 months ago

If they wanted to move jobs to the area, they'd lower sales and property taxes and keep income taxes the same. They'd also spend on infrastructure, so we could take advantage of our central location and move goods and services all over the country. People don't tend to look at income taxes when they move as much as they do property and sales taxes, and business owners can find loopholes that shield them from a lot of it as is. So, smart tax policy is not the plan.

They don't want to move jobs to the area. They want to lower state revenue. Intentionally. Once the obvious is obvious, it will be politically difficult to raise taxes again in order to fund basic state programs.

That was the real purpose of Laffer's plan when it was enacted under Reagan, and it's the real purpose of the plan now. Claiming that poor people will see increased social spending is a blatant lie. They'll see less.

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lucky_guy 2 years, 9 months ago

If a millionaire can get $20K tax cut how many businesses can you start for 20K? No this is to wreck the state economy and plow money into Brownie's campaign fund there is no other reason. Brownie is hoping that the Koch brothers will take their money and send it to a Political action committee but not start any meaningful business.

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jayhawklawrence 2 years, 9 months ago

When Laffer uses other states or a city like Detroit to justify his discredited tax policies it leaves me wondering how so many people would even listen to this nut much less pay him consulting fees.

So far, the people that Brownback has been hiring to "reform" our state and make it more "efficient" have been incredibly stupid.

The advantage of working with a consultant as loonie as Laffer is that it is hard to argue with people who are as dumb as a rock.

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Kate Rogge 2 years, 9 months ago

What's to stop them? The Kochs are already targeting the eight moderate Republicans who might have a shot in Hell of slowing down this train.

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Al_Maurer 2 years, 4 months ago

Hey Sychophant (aptly named),

Did you even read what you wrote? Smoot-Hawley raised taxes: and it didn't work.

Raising tariffs--and we weren't the first country to do so--isn't capitalism, it isn't free market.

You're probably too partisan to notice but Hoover was just as big a Progressive as FDR.

Skip the ad hominum attacks and talking points and engage your brain.

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just_another_bozo_on_this_bus 2 years, 4 months ago

"“It’s not a class warfare issue. It’s how you get to prosperity for everyone,” he said."

The douchebag probably even believes that.

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