piece in Bloomberg this morning, "Kansas Offers Cautionary Tale for Trump's Tax Ambition," motivates me to make the point again (unless I haven't already). And the point is: maybe in the grand scheme of things tax policy just doesn't really matter that much. From the piece (my emphasis):
Since [Governor Brownback] approved a reduction in personal income taxes and cut non-wage business income taxes for small-business owners in 2012, Kansas has fallen behind the national average in terms of job creation and personal income growth, according to data compiled by Bloomberg.
And you could say the same thing, by the way, about Governor Scott Walker, Wisconsin and its pesky high-tax, big-government, but prosperous neighbor, Minnesota. (I've written about this here, here and here.) Ask yourself, why are there twice as many Fortune 500 companies in Minnesota as in Wisconsin? If there's one thing we can be sure of it's not taxes.
When we first got married, my wife and I had a subscription with another couple to the Victory Gardens Theater on Lincoln Avenue. I only remember a handful of the productions, but one has stayed with me in particular, a one-man play in the 1993-94 season called, "Michael, Margaret, Pat & Kate," starring a Chicago-based singer-songwriter by the name of Michael Peter Smith. I'll never forget what Mr. Smith said about his singing career. In essence, it was:
Maybe I didn't try hard enough;
Maybe I tried too hard;
Maybe trying doesn't have anything to do with it.
And I wonder sometimes if that could be applied to states like Kansas and Wisconsin. In other words:
Maybe their taxes are too high;
Maybe they're too low;
Maybe tax policy doesn't have anything to do with it.
Maybe there's an entirely different reason (that we just don't know yet) to explain Wisconsin's economic lethargy vs. Minnesota's vibrancy or the failure of Kansas to jump-start its economy in the face of the relative strength of its neighbors. What if there's no economic policy emanating from the state capital that could level the playing field between, say, Minnesota and Wisconsin? What if there's something else here at play that we just don't know about?