Will Arthur Laffer Do for Kentucky What He Has Done for Kansas?
Arthur Laffer, author of the "Laffer Curve" and proponent of " trickle-down economics", a remnant from the Reagan years, has come to Kentucky. In fact, he has been here for several years with his Koch backed finances, and his five friends who donated hundreds of thousands of dollars to purchase Governor Bevin's sixty four House seats. The Governor appears to have tax problems and who better to call on than Arthur Laffer who has caused more state tax problems than most economist on record. Aided by the Kochs, sponsored by ALEC , Dr. Laffer has spread his doctrine of supply-side economics to as many legislatures as will give him a hearing. Kansas, and its Governor Sam Brownback, bought in to the Laffer message of cuts to personal income rates, elimination of top tax brackets, smaller government, cuts to state administrative cuts, all with the expectation that businesses would come to the state, corporate investment would increase, and employment would do the same.
But, things didn't go as planned. Instead the state lost $ 680 million a year in income taxes, annual revenues plunged from $ 6.33 billion to $ 5.78 billion, and an attempt was made to make this up in a $ 224 million higher sales and cigarette tax. One billion was reportedly diverted from highway repairs, tens of millions from universities, a hundred million diverted from public employee pensions, and cuts on state agencies. (editorial 7-1-16) Governor Bevin does not need Dr. Laffer to enact these measures that he has already put in place.
So why has the Governor invited Dr. Laffer in for some friendly chats? Certainly he owes him that much after he and his five friends generously donated so generously to the campaign. He owes it to the Koch brothers and to ALEC. But how does he think that supply-side economics will offer the model needed for Kentucky tax reform? Dr. Laffer will argue that the elimination of personal income taxes, lowering business tax rates, initiating right to work legislation, and reducing state social and medical services, will be just the thing Kentucky needs. A list of sales taxes, user fees will make up for the difference. Let Reganomics do to Kentucky what it has already done for Kansas. What is certain is that we cannot afford an economic experiment. Kentucky is already are at the bottom of the barrel in most economic statistics, only bankrupt Puerto Rico is worse off than we are. If in the past three and a half decades we are still waiting to see the positive effects of trickle-down economics for the common person, why should the Governor now give this theory a hearing?