The Kansas GOP Austerity Failure and the Minnesota Democratic Success
We’ve all heard the horror stories of how Kansas has been such a basket case under Laffer-curve worshiper Gov. Sam Brownback. Now let’s visit my former home state and several Lizard’s current domicile, Minnesota….
Chicago Tribune: Most liberal governor’ rights ship in Minnesota
So far, the test in Kansas of conservative economic principles has largely been a failure. As we read in the Tribune’s Perspective section Tuesday, large tax cuts and other austerity measures in recent years intended to spur growth have instead resulted in swollen deficits, credit downgrades and public schools having to close early because they’re out of money.
In contrast, the test in Minnesota of liberal economic principles has largely been a success. As we will read today, tax and spending increases in recent years have resulted in a budget surplus and a robust economic climate that’s the envy of the state’s Midwestern neighbors.
In 2010, former U.S. Sen. Mark Dayton of the Democratic-Farmer-Labor Party was elected to succeed Republican Gov. Tim Pawlenty, who left a $6.2 billion two-year budget deficit. Dayton’s plan was to tax the rich, but he was unable to impose that agenda until his party won solid majorities in both state legislative houses in the 2012 elections.
To a chorus of hand-wringing predictions that wealthy business owners would flee the state and unemployment would skyrocket, Dayton, himself a super-rich heir to the Target retail fortune, pushed through more than $2 billion in new taxes, more than half of them targeting the top 1 percent of earners. They included a 25 percent hike in the state income tax rate — to 9.85 percent — on annual income of over $250,000 per couple (by comparison, Illinois’ state income tax rate is a flat 3.75 percent).
Here are a few numbers from the April U.S. Congress Joint Economic Committee’s state-by-state economic snapshots
Unemployment rate: Kansas, 4.2 percent; Wisconsin, 4.6 percent; Minnesota, 3.7 percent; Illinois, 6.0 percent; national rate, 5.5 percent.
Average weekly private-sector earnings: Kansas, $784 (+2.3 percent over the past year); Wisconsin, $795 (+0.1 percent); Minnesota, $891 (+1.5 percent); Illinois, $893 (+1.6 percent); national average growth, 2.3 percent.
Annual GDP growth: Kansas, 1.9 percent; Wisconsin, 1.7 percent; Minnesota, 2.8 percent; Illinois, 0.9 percent; national average, 1.8 percent.
In the past year, Minnesota has added 47,000 private-sector jobs, leading Kansas, Wisconsin and Illinois in per capita growth in that metric.
Further, in the most recent Forbes ranking of the best states for business Minnesota was ninth, Kanas 25th, Wisconsin 32nd and Illinois 40th.
Anyone who takes Arthur Laffer seriously should be mocked mercilessly.