July 1, 2017
From Jonathan Taplin, Director Emeritus of the Annenberg Innovation Lab, via Conor Friedersdorf of The Atlantic:
Since the Great Recession of 2008, the United States has been involved in a controlled experiment being played out at the state level pitting two theories of government against each other. The conservative Republican theory to revive growth (which Trump has embraced) was championed in Texas and Kansas by Rick Perry and Sam Brownback. It held that cutting taxes on the wealthy and cutting regulation on business would surely stimulate growth. The progressive Democratic theory of growth was championed in California and Oregon by Jerry Brown and Kate Brown (they are not related). There, taxes were raised on the wealthy to pay for more education and public infrastructure spending and regulations on pollution, privacy and assault weapons were strengthened.
The results of the experiment are now in.
California and Oregon grew 4.2% and 4.1% respectively in 2015. Texas and Kansas grew 1.8% and -0.8% respectively in the same year. Although the Kansas tax cuts have been a huge windfall for the Koch Brothers whose company is based in Wichita, it has been a bust for the working class. As the Washington Post noted, “On the whole, Brownback’s policies modestly increased taxes for the poor and working class, who pay more in sales taxes than income taxes, while reducing taxes drastically for the rich.” In Kansas both the K-12 system and the Universities have undergone drastic cutbacks in spending, the state’s credit rating has been lowered and the state has experienced a net out migration of citizens.
Despite this evidence, Trump and the Republican Congress are about to impose the Kansas model on the whole country, cutting taxes on the wealthy and regulations on business, promising just like Brownback and Perry to bring growth back to the nation. Those promises will prove to be equally hollow. Billionaires will prosper, the stock market may boom, but the working class jobs and the 4% growth of California will not emerge for the nation as a whole.
Taplin and Friedersdorf encourage those who are not committed to this disastrous Republican option to make the fullest use of federalism: doing what needs to be done/should be done at the state level.