Today’s Brew 11-6-14

David Weigel writes for Bloomberg about the election result in Kansas where Governor Sam Brownback was re-elected. And, Art Laffer is talking publicly about politics:

The Guru of Supply-Side Economics Had a Very Good Election

Art Laffer declares victory in Kansas.

Art Laffer was used to wearing the black hat. For much of 2014, as polls showed Kansas Governor Sam Brownback in danger of losing re-election, progressives expected supply-side tax cuts to be rejected. That meant a rejection of Art Laffer, the Steven Spielberg of supply side, the man whose napkin illustration of how lower taxes meant higher revenue changed American policy forever in 1981. A generation later, Laffer stumped with Brownback, endorsing his deep tax-cut plans because “states without income taxes have grown much, much faster.”

Most people expected Brownback to lose. Plenty of columnists, including Tom “What’s the Matter with Kansas?” Frank, pre-wrote the obituary of supply-side. And then Brownback won, taking 98 of Kansas’s 105 counties. Laffer’s verdict on the election?

“I liked it,” he said.

– – – – –

“The states that cut their taxes really outperform the states that raise them,” Laffer said. “People will see that. It’s really hard to balance a budget on the backs of unemployed, and people really do leave states when that’s tried. Look, the problem with cutting taxes is that you are going to suffer short-term losses in revenues. When you raise taxes you think you’ve got a windfall. Then in a few years, you’re Detroit. Kansas, by contrast, is going to do very well. Kansas City is going to be located in Kansas, not Missouri, if you give it a couple years.”


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