How Not To Run A State

If we need a model for fucking things up, Kansas looks like an appropriate one:

Revenue numbers for July through September, the first three months of fiscal year 2015, suggest Kansas’ revenue gap is permanent, not temporary. The state anticipated $578 million in personal income tax collections over the summer, but it took in just $524 million, an overestimate of more than 10 percent. That was nationally atypical; according to the Rockefeller Institute of Government, 14 states have published projected and actual monthly personal income tax receipts through September, and the other 13 all came within 5 percent of expectations.
Kansas’ wide miss was probably a result of wading into uncharted territory with its tax reforms. In addition to cutting income tax rates, Kansas made itself the only state with a general personal-income tax that exempts “pass-through income” from tax.
Business entities like S-corporations and limited liability companies are not taxed at the corporate level; instead, their income is passed through to their owners, who then pay personal income tax on the profits in most states — but not Kansas.
One problem with this policy is that pass-through income and wage income are often fungible. A small-business owner might choose to take less of his income as (taxable) salary and more as (tax-free) profits, reducing Kansas income tax revenues. Estimating how many small-business owners would make such changes was the key to figuring out the cost of the tax cuts.
“I think there is major reshuffling of how people are paying their taxes,” says Duane Goossen, who served as budget director under the three governors who preceded Mr. Brownback, including the Republican Bill Graves and the Democrat Kathleen Sebelius. “You have every incentive to push your salary down and take all of your income as profit.”
Mr. Stotts, the taxation director, expressed hope that revenues would be stronger in the spring; he noted that taxpayers who make quarterly estimated tax payments are setting those payments based on last year’s tax bills, which (given last year’s revenue shortfall) were low. If incomes are strong this year, the resulting boost in revenues may show up in final payments made with tax returns filed in the spring, rather than estimated payments made this summer and fall.

"Mr. Stotts, the taxation director, expressed hope that revenues would be stronger in the spring." Mom always said, "wish in one hand, shit in the other; see which one fills up faster."  Looks like that is fiscal policy in the state of Kansas (and Ohio, for that matter).  Mom was also a math teacher, and understands that cutting income tax rates by 20% is impossible to make up by increased economic growth spurred by those tax cuts.  She's also a CPA, and understands that "pass-through income" has to be taxed (and should be taxed on a progressive scale) to prevent ridiculous skewing of the tax burden from successful business people to ordinary working stiffs.  In other words, she's about 20 times more intelligent than most Republicans, including those successful business people.  Like her, I knew such policies don't work, but I'm not in charge of a state.  Citizens tend to leave that to the dumb people (aka Republicans).