Bruce Rauner, the Republican nominee for Governor of Illinois, today announced in great detail his tax plan should he get elected in November over the incumbent Democrat, Governor Pat Quinn. Rauner's tax plan would phase in a decrease to the Illinois state income tax, bringing it down from 5 percent to 3 percent over a period of four years, reported Natasha Korecki of the Chicago Sun Times. In Rauner's "Bring Back Blueprint: Jobs and Growth Agenda," he claims that rolling back the state income to its 2011 levels will result in a "Pro-Growth Agenda."
The Rauner claim in the "Bring Back Blueprint: Jobs and Growth Agenda," is the following: "We need meaningful structural reforms to reduce costs for job creators and attract new companies in order to bring about lasting economic growth." Rauner goes on to say, "Reforms are outlined to modernize our tax code and create a pro-growth environment."
Kansas Republican Governor Sam Brownback also promoted a "Pro-Growth Agenda." In 2012, he asked for and received from the Kansas state legislature a cut in the state income tax for the wealthiest of Kansans, in the amount of 25 percent. The tax law passed in Kansas also eliminated all taxes on business profits that are reported on individual income returns, reported the New York Times. The elimination of these business taxes makes Kansas the only state in the union to eliminate these taxes on pass-through businesses.
The cuts promoted by Brownback are the same ones that Republicans have employed for decades: There will be no loss of revenue because of all the economic growth!
“Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy,” he wrote in 2012. “It will pave the way to the creation of tens of thousands of new jobs, bring tens of thousands of people to Kansas, and help make our state the best place in America to start and grow a small business.”
The result were disastrous, as evidenced by a drop of $338 million in revenues in the 2014 fiscal year, forcing the state to dip heavily into a reserve fund, nearly depleting the fund. The cuts, which largely benefited the wealthy, cost the state 8 percent of the revenue it needs for schools and other government services. The New York Times quoted the Center on Budget and Policy Priorities, which the cuts are about the "same as the effect of a midsize recession."
Moody cut the state’s debt rating in April for the first time in at least 13 years, citing the Brownback tax cuts and a lack of confidence in the state’s fiscal management.
The growth simply never happened in Kansas. The question has been raised in the national media, "What's the matter with Kansas?" Kansas, in fact, was one of only five states to lose employment over the last six months, while the rest of the country was improving. It has been below the national average in job gains for the three and half years Mr. Brownback has been in office.
Unfortunately, it doesn't work. Much like former President Ronald Reagan's trickle-down economics, the plan didn't work then either and the Rauner plan will not work. In fact, the Reagan economy did not grow in the early days and the Reagan was forced to raise taxes. Reagan raised taxes during his eight years in office. Reagan, as president "raised taxes" in 1982, 1984, 1985, 1986 and 1987.
History repeats itself in Kansas, and surely would repeat itself in Illinois should Bruce Rauner get elected, and if House Speaker Michael Madigan and Senate President John Cullerton go along with the scheme.
Either winning the election and/or getting the leaders to go along are two really big "ifs."
The experiment with supply side tax cuts has failed in Kansas and Brownback will likely lose reelection this November to his Democratic opponent, Paul Davis, the state House Minority leader.
More than 100 Kansas Republican officials endorsed Davis. “We are deeply concerned by the direction Sam Brownback is taking Kansas,” said Wint Winter, a former state senator who is supporting Davis, according to the Wall Street Journal account. “We are all Republicans. But we will always be Kansans first.”
Among the Republicans opposing Brownback and supporting House Minority Leader Davis, are two former lieutenant governors, a former congresswoman and a state insurance commissioner.
The nonpartisan Cook Political report has changed the race from "leaning Republican" to a tossup. Also, a recent poll, SurveyUSA, showed Davis leading Brownback by 6 percentage points.
Rauner will need a list of excuses, first should he win, and then convince the leaders to go along. Here is the list of excuses Brownback is making on the reason his plan didn't work: Spending wasn’t cut enough, too many rich people sold off stock in the previous year, and it’s the price of creating jobs. Rauner can take his pick in advance.