Steve Forbes would like to remind you that income tax cuts always work:
Governor Sam Brownback of Kansas was pilloried for enacting major tax reductions that supposedly blew gaping holes in the state’s budget because rapid economic growth didn’t instantly materialize. Put aside the fact that some of his other tax proposals weren’t enacted and that he didn’t get all the tightening on overall spending he wanted. Democrats thought they’d knock him out in 2014. Instead, Brownback won, and his tax cuts, which took effect little more than two years ago (he not only whacked income tax rates but also eliminated those levies altogether for small businesses), are starting to yield a bumper crop in prosperity. Private-sector job growth in Kansas is now outpacing that in most other states. The state’s unemployment rate is among the nation’s lowest. Just as impressive is Kansas’ employment-to-population ratio, which is well above the national average.
Ohio’s chief executive and possible presidential candidate, John Kasich, is also hacking away at his state’s personal income tax, with an eye to eliminating it altogether, relying instead on broad-based consumption taxes. (He’s already done away with Ohio’s death tax.)
Even blue states are getting the tax message. Look at Maine, which a GOP presidential candidate hasn’t carried since 1988. Governor Paul LePage is pushing to eliminate the state’s income tax by 2020. Maine has long been in the economic dumps, and LePage, who was a successful businessman before going into politics full-time, knows that this is chiefly due to the state’s hostile tax environment. Liberals and legacy media outlets can’t stand LePage’s unabashed free-market principles and his willingness to let reporters know what he thinks of them and their employers. Their consternation was palpable when he won a stunning reelection victory.
“Work” of course depends on what you’re trying to accomplish. If the goal is increased GDP growth and revenues, with the benefits going largely to entrepreneurs and their employees — then, yes, income tax cuts are just the thing.
But if your goal is to set faction against faction in a neverending fight over a shrinking pie, with growing opportunities for graft and crony capitalism, then, no, income tax cuts just aren’t for you.