Kansas is one of the reddest of America’s red states—there’s not a hint of purple in it. The state’s voters went for Donald Trump by more than 20 percentage points in the last presidential election, and Republicans have a firm command of state government.
But look at what happened in the GOP-controlled legislature: A coalition of Republican and Democratic lawmakers teamed up to pass a bill that increased state income taxes by an estimated $1.2 billion and killed a tax break for businesses. The legislators were reversing huge reductions in state taxes that Gov. Sam Brownback, a most conservative Republican, had signed into law in 2012 and 2013.
Brownback said the tax cuts would bring explosive economic growth and create thousands of new jobs for Kansas. He was, in effect, conducting a state-level experiment of the theory that tax cuts will pay for themselves because the economic growth they bring means more tax revenues for government.
The experiment failed. Kansas did not see the growth and the flood of new jobs that Brownback promised. The tax reductions instead blew a hole in the state budget, and left Kansas without enough money for basic services like schools and roads. The state was facing a $900 million budget deficit.
That prompted even Republican legislators to restore some of the old tax rates so that state government would have enough money to do the things that citizens normally expect it to do. When Brownback vetoed the tax hike, both chambers of the legislature voted by two-thirds majorities to override the veto.
I mention these events in Kansas because there is a significant number of Georgia legislators who want to do the same thing here that Brownback did in the Sunflower State. They want to reduce state income taxes, especially for businesses and corporations, to as close to zero as they can get. They would make up for the shortfall in revenues by raising the state sales tax. What they don’t mention is that it would probably require a sales tax of 12 or 13 percent to replace the income tax.
State Sen. David Shafer (R-Duluth), who is running for lieutenant governor next year, is one of the leaders here. He got the ball rolling in 2014 when he sponsored a constitutional amendment, subsequently approved, that caps the state income tax at its current top rate of 6 percent.
In every legislative session, there are several bills introduced that would cut state income taxes by 1 or 2 percent and offset that with a sales tax hike or the elimination of special exemptions. None of those bills have passed, but people like Gov. Nathan Deal have had to be the adult in the room and warn lawmakers of the folly of their idea.
When Rep. John Carson (R-Marietta) introduced a bill in 2015 in cut state income taxes, he discussed the measure with Deal after session had ended. The bill was still alive for a possible vote in the following legislative session. “I met with the governor in his office the second week of July,” Carson said. “One of the main concerns brought up was Kansas.”
Carson’s bill went nowhere.
Like it or not, the state income tax is the major source of revenue for Georgia’s government. It supplies the bulk of revenues to pay for things like schools, roads, health care and public safety. When you start fooling with that tax, you endanger a state’s ability to provide basic services to its constituents.
There will always be a strong push in some legislative quarters to eliminate the state income tax. Kansas is a stark reminder of how that move can backfire.
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