Supply side, or "trickle down" economics has been one of the central policies of the Republican party ever since Ronald Reagan came down from the mountain with the Laffer Curve carved into stone tablets. But supply side theory has probably never been more purely or completely implemented in any setting than it has been in the state of Kansas. And now the verdict is in: supply side economics is a complete, unmitigated disaster.
It took them a while to get there, but even Kansas Republicans have had enough of Governor Sam Brownback's attempt to prove that trickle down actually works. On Tuesday evening the GOP controlled Kansas legislature finally brought Brownback's experiment to an end with an override of his veto of a bill raising taxes on the rich.
The significance of this should not be lost. Kansas is one of the most conservative GOP-controlled states in the country. Republicans outnumber Democrats 80 to 45 in the state House, and 31 to 9 in the state Senate. It takes a two-thirds majority to override a veto. The Senate did so with the exact number of votes needed. The House accomplished the task with four votes to spare.
And it wasn't just Republican back-benchers working with Democrats who pulled off the coup. GOP leadership had had enough of Brownback's insanity as well.
"He [Brownback] believes — still believes — in this, and that’s OK. I don’t,” Senate Majority Leader Jim Denning said. "I’ve made many, many bad decisions in my business career, as many bad as good, but I’ve always backed up and mopped up my mess. That’s what I’m doing now."
Denning supported Brownback's tax cuts on wealthy Kansans in 2012, but joined Democrats and a newly elected group of Republicans opposed to Brownback's policies in overriding the governor's veto.
Now Kansas goes back to sanity in terms of taxes. The legislation restores a third tax rate for high income filers. It will also eliminate an exemption for some 330,000 farmers and business owners. The new tax rates will raise an estimated $1.2 billion over two years, helping to fill a projected budget shortfall of $889 million through June 2019.
Brownback and his allies would like everyone to think that things are just fine, and that the new taxes are unnecessary. Of course he presented the tax increases as harmful to average Kansans. "We can and must balance our budget without negatively harming Kansas families," he said in his veto message.
It's not clear what families Brownback thinks will be hurt by the increased taxes. Sure, Kansas residents and major GOP backers Charles and David Koch will have to pay more. But middle class families will get at least one thing they desperately need -- better funded schools.
The Kansas Supreme Court ruled in March that the state was not properly funding its schools. Prior to passing the tax bill legislators approved a measure that will bring an extra $293 million in education funding over the next two years. The tax increase will help cover that expenditure. At least some members of the Kansas GOP are starting to recognize that you do have to pay for things your constituents need and want; something that Republicans claim to understand but never seem to accomplish.
And so the latest attempt to make supply side economics work has met with complete failure. Republicans have embraced the repeatedly disproven hypothesis ever since their hero Reagan pronounced it, and it has led nationally to a prolonged period of wage stagnation and increasing economic inequality. Literally none of the supposed benefits of supply side have come to pass, unless you are a millionaire. In that case you're doing just fine.
Kansas Republicans have had an epiphany. Well, some at least. When do Republicans in Washington DC grow a pair and admit that their 35 year love affair with trickle down has been a disastrous mistake? Many of those Republicans are anxiously awaiting their chance to rewrite the tax code to further enshrine the supply side concept even as they have watched Brownback fiddle with it while Kansas has been burning down around him.
It's easy to explain the relationship of the GOP to supply side with a paraphrase of Upton Sinclair:
"It is difficult to get a man to understand something when his campaign contributions depend upon his not understanding it."