The tax-cutting efforts of the embattled Gov. Sam Brownback were praised in a recent commentary in the Kansas City Star and The Wichita Eagle by Stephen Moore, chief economist at the Heritage Foundation, a conservative think tank in Washington, D.C. (“ Nothing the matter with Kansas’ tax policy,” July 10 Opinion). However, my research shows Moore used outdated and inaccurate job-growth information.
The wrong data undermined one of Moore’s arguments – that low-tax states have shown tremendous job gains and that employment often doesn’t grow as strongly in high-tax states.
Moore is a supporter of the low-tax mantra of Arthur Laffer, an economist who led Brownback and Kansas into the tax-cut wasteland and the subsequent decimation of state revenues in 2014. In part of his commentary, Moore pointedly criticized a column written by Paul Krugman of the New York Times, who had lambasted the Kansas tax-cut strategy (“ Kansas shows enduring power of bad ideas,” July 1 Opinion). Moore responded that states following “Krugman’s (and President Obama’s) economic strategy to a tee are getting clobbered by tax-cutting states.”
Revved up, Moore then added: “No-income-tax Texas gained 1 million jobs over the past five years; California, with its 13 percent tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. Oops.”
I reread Moore’s commentary after I had finished research for a Kansas City Star editorial on the anemic job-growth rate in Kansas. Here are the four problems I subsequently found in that single paragraph written by Moore:
• When Moore wrote about job creation “over the past five years,” he measured from December 2007 to December 2012, using federal Bureau of Labor Statistics information. That was an odd and ultimately misleading decision. The bureau’s data is updated monthly, so “the past five years” easily could and should have been from mid-2009 to mid-2014. That would have provided more up-to-date figures, not 18-month-old data.
• Texas did not gain 1 million jobs in that 2007-12 period. The correct figure was a gain of 497,400 jobs.
• Florida did not add hundreds of thousands of jobs in that span. It lost 461,500 jobs.
• New York, which has one of the highest income-tax rates, did not lose jobs during that time. It gained 75,900 jobs.
Bureau of Labor Statistics figures can be skewed and cherry-picked. (For example, California since December 2012 – when Moore stopped measuring employment growth – has added 541,000 jobs, which is more than Texas’ 523,400. So high taxes are good?)
The problems with Moore’s commentary damaged his credibility on the jobs issue. They also didn’t help bolster Brownback’s case that the tax cuts are going to work out just fine.