Celebrity economist Arthur Laffer urged Kansas lawmakers to stay the course on cutting income taxes and battling unions to bring the state to greater prosperity.
“If you tax people who work and you give money to people who don’t work; do I need to say the next sentence? Don’t be surprised if you find a lot of people not working,” said Laffer, who consulted with Governor Sam Brownback and Revenue Secretary Nick Jordan on the administration’s plan to cut taxes on select business income.
Laffer told the committee that the nine states without a state income tax significantly outperform higher-tax states. “The performance difference is huge,” he said. You can’t tax a state into prosperity. You really can’t.”
Republican Members of the Senate Assessment and Taxation Committee appeared awed by Laffer, best known as the architect of President Reagan’s supply-side economic policies.
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“What an honor and privilege to have you here in Kansas,” said Sen.Julia Lynn, R-Olathe.
But Sen. Tom Holland, a Democrat who ran against Brownback in the 2010 election, questioned Laffer’s assertions that income-tax policies are what make the prosperous state’s prosperous.
For example, he pointed out that Texas and Alsaska have vast energy resources. Florida and Nevada, tourism.
“I think it’s a false analogy,” Holland said.
Sen. Les Donovan, R-Wichita, admonished Holland for his aggressive questioning of Laffer, who he said has “proven expertise in the field of economics going back decades.”
“I don’t want any more of that” kind of questioning, Donovan said. “We’ve had that discussion but that’s the last one I’m going to allow.”
Responding to Holland, Laffer acknowledged that some of the other states do have advantages.
“You’re right, Florida is not Kansas,” he said. “But don’t tell me you can’t learn anything from Florida.”
He also said there’s also a lot of internal data from within states such as Ohio and West Virginia showing the effects of tax increases and cuts.