How Low Can Taxes Go? Outside Washington, Republicans Find … – New York Times
The debate promises to test the enduring relevance of one of the most fundamental principles of modern conservatism supply side economics, the idea that if you cut taxes far enough, the economy will expand to the point that it generates new tax revenue.
With the federal deficit growing and economic growth sputtering along in the low single digits, the Republican Party is facing questions from within over what many see as a blind faith in the theory that deep tax cuts are the shot of economic adrenaline a languid economy needs.
Tax cuts good. And thats about as much thinking that goes into it, said Chris Buskirk, a radio host and publisher of American Greatness, a conservative online journal. Now, he said, Republicans in Washington seem to be in an arms race to the lowest rates possible.
Everybody is trying to overbid each other, Mr. Buskirk said. How much more can we cut?
Outside Washington, Republicans are discovering there are limits.
In South Carolina, Republicans overrode their governors veto and a blocked a filibuster to increase the gas tax. They also rejected a series of broader tax cuts on the grounds that they were too expensive and voted instead to create a smaller tax incentive for low-income families.
The Republican governor of Tennessee, Bill Haslam, signed into law the first increase in the states gas tax in almost three decades. He defied conservative groups that said a state with a $1.1 billion budget surplus had no business asking people to hand over more of their money.
And in the most striking rebuke of conservative tax policy in recent memory, Republicans in Kansas have undone much of the tax overhaul that Gov. Sam Brownback held up as a model for other states and the federal government to emulate.
A fantastic way to go, he said this year, urging Mr. Trump and Congress to follow suit with deep reductions to corporate and individual rates. But Republican lawmakers in Kansas decided that they could cut only so much without doing irreparable harm to vital services and voted to increase taxes by $1.2 billion last month. Mr. Brownback vetoed the plan, but Republicans overrode him.
Much of the devotion to tax cuts as an inviolable Republican principle stems from the success that President Ronald Reagan and Congress had in 1981 when they agreed to an economic recovery package that included a rate cut of about 25 percent for individuals.
But at that time, the highest marginal tax rates approached 70 percent, leaving much more to cut and a much larger chunk of money to be injected back into the economy. At some point, economists said, tax policy that is too aggressive leaves too little money to inject to make a difference.
Bruce Bartlett, who advised Reagan on the 1981 tax cuts, chastised Republicans for what he described as their reflexive desire to drive rates lower.
The essence of what the supply-siders were trying to accomplish was accomplished by the end of the Reagan administration, Mr. Bartlett said.
Yet, he added, Republican policy still mimics what was done under Reagan. Theyve got to keep pressing ahead no matter what, he said.
The situation in Kansas was, for at least some conservatives, a jolting realization that tax cuts can be too blunt an economic instrument.
After Mr. Brownback took office in 2011, he pursued a plan that included cuts and, in some cases, an outright elimination of taxes for businesses and individuals to help invigorate the states underperforming economy. He described it as an experiment in conservative governance that could demonstrate what Republicans were capable of if they controlled legislative and executive branches across the country. (He is Kansas first Republican governor since 2003.)
The conservative movement got behind him. The plan was approved with the lobbying muscle of the billionaire Koch brothers political network, which is overseen from Wichita, where one of the brothers, Charles G. Koch lives. It had the blessing of prominent conservative economists like Stephen Moore and Arthur Laffer, the Republican Partys foremost supply-side evangelist.
In urging the Kansas Legislature to act, Mr. Laffer and Mr. Moore said the cuts would have a near immediate positive impact on the economy. Mr. Brownback said the plan would pay for itself.
That is where the parallels with Washington start to trouble those who are critical of the plan the Trump administration has laid out. The plan would slash the rate paid by businesses to 15 percent and shrink the number of individual income tax brackets from seven to three 10, 25 and 35 percent.
Mr. Laffer and Mr. Moore, a Heritage Foundation economist, have both helped shape the presidents tax policy.
Steven T. Mnuchin, the Treasury secretary, said the Trump tax cuts would pay for themselves with the economic growth they would inevitably create.
In Kansas, the predicted economic bloom did not materialize. Employment and economic growth have lagged far behind the rest of the nation. The state treasury had so little money to spread around that the Kansas Supreme Court found that the states spending on public education was unconstitutionally low.
If there were three words I could say to Congress right now, said Stephanie Clayton, a Republican state representative from a district in the Kansas City area, they would be, Dont do it.
She criticized what she said was a desire by her party to be more faithful to the principle than to the people Republicans were elected to help. Mr. Brownback and many conservatives, she said, overpromised on the tax cuts as a sort-of Ayn Rand utopia, a red-state model, citing the author whose works have influenced the American libertarian movement.
And I loved Ayn Rand when I was 18 before I had children and figured out how the world really works, Ms. Clayton added. Thats not how it works, as it turns out.
Mr. Trump and Republicans in Washington are undeterred. Kansas, they argue, is not an economic microcosm for the country, with its unique dependence on energy, agriculture and aircraft manufacturing. And lawmakers there never could reduce spending enough to correspond to the much lower level of tax revenue coming into the state treasury.
Many conservatives who support a tax overhaul said they anticipated considerable growth with a reduction in corporate rates, which are among the highest in the world. If those are lowered to 15 percent, down from the current 35 percent, businesses will not only reinvest in the United States but relocate here, they said.
At 15 percent, Swiss bankers will move here, said Grover Norquist, president of Americans for Tax Reform.
But restraining federal spending is still going to be a key part of the equation. What you need is not an explosion of spending, Mr. Norquist added. And you need the economy to grow faster than the size of the government.
In a world in which Mr. Trumps deconstruction of the administrative state reduces the size and cost of the government, the tax cuts make sense. But if lawmakers do not have the nerve to find savings somewhere, like in the social safety net for retirees, the outcome could end up resembling something close to Kansas failed experiment.
The question is whether you can put together some kind of revenue-neutral tax reform, said N. Gregory Mankiw, a professor of economics at Harvard and chairman of the Council of Economic Advisers under President George W. Bush. I dont see the political will to do that right now. Certainly not in this environment.
A version of this article appears in print on July 3, 2017, on Page A10 of the New York edition with the headline: Cut Taxes? In States, G.O.P. Goes Other Way.
Read more:
How Low Can Taxes Go? Outside Washington, Republicans Find ... - New York Times
- Why this Republican lawmaker is still showing up to work during the shutdown - NPR - October 28th, 2025 [October 28th, 2025]
- The Republican Plan to Reform the Census Could Put Everyones Privacy at Risk - WIRED - October 28th, 2025 [October 28th, 2025]
- Republican candidates to visit the Shore today - Shore Daily News - October 28th, 2025 [October 28th, 2025]
- LEADER JEFFRIES ON CNN: WE ARE DEMANDING THAT OUR REPUBLICAN COLLEAGUES SIT BACK DOWN AT THE TABLE Congressman Hakeem Jeffries - Congressman Hakeem... - October 28th, 2025 [October 28th, 2025]
- Democrats could draw maps to put every Virginia Republican representative in a blue district. Here's how. - Cardinal News - October 28th, 2025 [October 28th, 2025]
- First Michigan Republican governor debate set for this week without John James - MLive.com - October 28th, 2025 [October 28th, 2025]
- Head of the Alamos historic site resigns after top Texas Republican criticized her views - PBS - October 26th, 2025 [October 26th, 2025]
- What one Texas Republican Congressman tells his constituents about the shutdown - NPR - October 26th, 2025 [October 26th, 2025]
- Rep. Carter Statement on the Republican Houses Failure to Uphold Constitutional Responsibilities - Representative Troy Carter | (.gov) - October 26th, 2025 [October 26th, 2025]
- Trump's redistricting push hits roadblocks in Indiana and Kansas as Republican lawmakers resist - The Pantagraph - October 26th, 2025 [October 26th, 2025]
- Republican members of Redistricting Commission are disrespecting Ohio voters | Letters - AOL.com - October 26th, 2025 [October 26th, 2025]
- Republican Minn. gov candidate blasts Tim Walz on election integrity: fraud capital of the country - New York Post - October 26th, 2025 [October 26th, 2025]
- The Republican Party's selective outrage - Daily Kos - October 26th, 2025 [October 26th, 2025]
- Zohran Mamdani Slams Trumps Republican Party: Only Agenda Is Cruelty and Punishment Towards Muslims and Minorities - Yahoo - October 26th, 2025 [October 26th, 2025]
- The CEO of the Alamo's historic site has resigned after a top Texas Republican criticized her - Yahoo - October 26th, 2025 [October 26th, 2025]
- Republican tensions rise over Kevin McCarthys faltering push to fight California redistricting - CNN - October 24th, 2025 [October 24th, 2025]
- The CEO of the Alamo's historic site has resigned after a top Texas Republican criticized her - ABC News - Breaking News, Latest News and Videos - October 24th, 2025 [October 24th, 2025]
- LEADER JEFFRIES: DONALD TRUMP AND REPUBLICAN POLICIES ARE MAKING LIFE TOO EXPENSIVE - Congressman Hakeem Jeffries (.gov) - October 24th, 2025 [October 24th, 2025]
- DAY 24 OF THE TRUMP-REPUBLICAN SHUTDOWN: Congresswoman Maxine Waters Shares Resources and Information for Consumers Impacted by the Shutdown - U.S.... - October 24th, 2025 [October 24th, 2025]
- Carter teams up with Miss. Republican in hopes of getting the NFIP renewed - fox8live.com - October 24th, 2025 [October 24th, 2025]
- Chairman Graves Joins House Republican Leadership and Secretary Duffy at Press Conference on the Government Shutdown - House Transportation and... - October 24th, 2025 [October 24th, 2025]
- Troy Carter teams up with Miss. Republican in hopes of getting the NFIP renewed - fox8live.com - October 24th, 2025 [October 24th, 2025]
- Republican Jack Ciattarelli hopes this is the year he declares victory in N.J. - CBS News - October 24th, 2025 [October 24th, 2025]
- The CEO of the Alamos historic site has resigned after a top Texas Republican criticized her - AccessWdun - October 24th, 2025 [October 24th, 2025]
- Jack Smith Agrees to Republican Demand to TestifyWith a Major Catch - The New Republic - October 24th, 2025 [October 24th, 2025]
- Trumps Attack Dog Wildly Smears Republican in White House Teardown Feud - The Daily Beast - October 24th, 2025 [October 24th, 2025]
- The New Republican Voice of Sanity Is Marjorie Taylor Greene? - The American Prospect - October 23rd, 2025 [October 23rd, 2025]
- LEADER JEFFRIES ON MSNBC: WE HAVE TO DECISIVELY ADDRESS THE REPUBLICAN HEALTHCARE CRISIS - Congressman Hakeem Jeffries (.gov) - October 23rd, 2025 [October 23rd, 2025]
- Video Republican Sen. James Lankford on East Wing construction: This is not bad timing - ABC News - Breaking News, Latest News and Videos - October 23rd, 2025 [October 23rd, 2025]
- A rare Trump-Republican rift over beef: From the Politics Desk - NBC News - October 23rd, 2025 [October 23rd, 2025]
- LEADER JEFFRIES: THE REPUBLICAN HEALTHCARE CRISIS GROWS WORSE BY THE DAY - Congressman Hakeem Jeffries (.gov) - October 23rd, 2025 [October 23rd, 2025]
- Trump nominee Paul Ingrassia withdraws after rare Republican pushback over text messages - Reuters - October 23rd, 2025 [October 23rd, 2025]
- Republican Rep. Jeff Hurd of Colorado talks about the ongoing shutdown - NPR - October 23rd, 2025 [October 23rd, 2025]
- DAY 21 OF THE TRUMP-REPUBLICAN SHUTDOWN: Crypto JUST Experienced a Major Meltdown. How is the Trump-Republican Shutdown Paving the Way for a Repeat? -... - October 23rd, 2025 [October 23rd, 2025]
- North Carolina gets Trump-backed election map aimed at gaining Republican seat - South China Morning Post - October 23rd, 2025 [October 23rd, 2025]
- They cant stop me: Republican bucks Burgum over owl-kill plan - E&E News by POLITICO - October 23rd, 2025 [October 23rd, 2025]
- Lastinger, Duncan head to runoff in Republican primary to replace ex-SC Rep. RJ May - WIS News 10 - October 23rd, 2025 [October 23rd, 2025]
- Trump hopes Putin will come through for him, says indicted Republican - The Times - October 23rd, 2025 [October 23rd, 2025]
- My Last Day as an Accomplice of the Republican Party - The Bulwark - October 21st, 2025 [October 21st, 2025]
- Republican Representative Says Democrats Hate the Military, Echoing Trumps Attacks - The New York Times - October 21st, 2025 [October 21st, 2025]
- DAY 20 OF THE TRUMP-REPUBLICAN SHUTDOWN: What is the Trump Administration Doing During the Government Shutdown? Plotting on How to Make Wall Street... - October 21st, 2025 [October 21st, 2025]
- Some Republican Senators Entertain Nuking the Filibuster to End the Shutdown - NOTUS News of the United States - October 21st, 2025 [October 21st, 2025]
- Small business owner Will Martin enters Republican primary for lieutenant governor - Wisconsin Examiner - October 21st, 2025 [October 21st, 2025]
- LEADER JEFFRIES: EVERY DAY THAT PASSES BY WITHOUT ACTION, THE REPUBLICAN HEALTHCARE CRISIS GETS EVEN WORSE Congressman Hakeem Jeffries - Congressman... - October 21st, 2025 [October 21st, 2025]
- Members of District 42 Republican Party submit signatures to force special election - Grand Forks Herald - October 21st, 2025 [October 21st, 2025]
- Republican Rep Says There Is a King in America, Actually - The New Republic - October 21st, 2025 [October 21st, 2025]
- Republican Gina Swoboda a force in Arizona GOP politics - azcentral.com and The Arizona Republic - October 21st, 2025 [October 21st, 2025]
- Report: Aide who died in fire was having an affair with Republican congressman - Augusta Free Press - October 21st, 2025 [October 21st, 2025]
- House Republican campaign committee nets record-shattering fundraising haul in third quarter - Washington Times - October 21st, 2025 [October 21st, 2025]
- Opinion | From Buckley to MAGA: The moral decay of the Republican Party - Alabama Political Reporter - October 21st, 2025 [October 21st, 2025]
- GOP lawmaker claims his and other Republican offices have been targeted with flags depicting vile symbol - CNN - October 19th, 2025 [October 19th, 2025]
- All eyes are on Trump after no Republican emerges as the frontrunner in Georgias U.S. Senate race - Georgia Recorder - October 19th, 2025 [October 19th, 2025]
- Donald Trump Says Republican Must Be Thrown Out of Congress ASAP - Newsweek - October 19th, 2025 [October 19th, 2025]
- Inside the Republican network behind big sodas bid to pit Maga against Maha - The Guardian - October 19th, 2025 [October 19th, 2025]
- Opinion | Happy birthday to an old Democrat, from this Republican - thegazette.com - October 19th, 2025 [October 19th, 2025]
- Republican Frustration With Kristi Noem Has Reached a Boiling Point - NOTUS News of the United States - October 19th, 2025 [October 19th, 2025]
- Mahoning County Republican Party calls for resignation of clerk of courts - WKBN.com - October 19th, 2025 [October 19th, 2025]
- Trump diverts anti-terror funds from Democratic strongholds to Republican states - Reuters - October 17th, 2025 [October 17th, 2025]
- Mfume, Maryland Delegation Members Urge Republican Leaders to Reopen Government, Prevent Health Care Costs from Skyrocketing and Protect Rural Health... - October 17th, 2025 [October 17th, 2025]
- American Flag With Swastika Is Found in Republican Congressmans Office - The New York Times - October 17th, 2025 [October 17th, 2025]
- First Thing: JD Vance brushes off racist texts in Republican group chat as what kids do - The Guardian - October 17th, 2025 [October 17th, 2025]
- Im still the same Ed McMahon: New Hanover County Sheriff switches from Democrat to Republican after 16 years - WECT - October 17th, 2025 [October 17th, 2025]
- The Lonely House Republican Still Coming to Work During the Shutdown - The New York Times - October 17th, 2025 [October 17th, 2025]
- US Capitol police investigating flag with swastika in Republican representatives office report - The Guardian - October 17th, 2025 [October 17th, 2025]
- Republican Lawmaker Blames Coordinated Ruse for Swastika-Emblazoned Flag in His Office - NOTUS News of the United States - October 17th, 2025 [October 17th, 2025]
- The Racist Roots, and Racist Present, of Todays Republican Party - The American Prospect - October 17th, 2025 [October 17th, 2025]
- NYC Republican mayoral hopeful Sliwa: "I'm the only one standing between Zohran Mamdani ... and Zohran lite" - CBS News - October 15th, 2025 [October 15th, 2025]
- Why this former Republican is going to a No Kings protest in Idaho - Idaho Capital Sun - October 15th, 2025 [October 15th, 2025]
- DAY 14 OF THE TRUMP-REPUBLICAN SHUTDOWN: Part I: How is the Trump Administration Using the Shutdown as Cover to Break the Law and Shutter Crucial... - October 15th, 2025 [October 15th, 2025]
- Republican Rep. Mike Lawler on his calls for Democrats to reopen the government - NPR - October 15th, 2025 [October 15th, 2025]
- Republican lawmakers demand Treasury probe CAIR over alleged Hamas ties and terrorism concerns - Fox News - October 15th, 2025 [October 15th, 2025]
- Supreme Court takes up Republican attack on Voting Rights Act in case over Black representation - ABC News - Breaking News, Latest News and Videos - October 15th, 2025 [October 15th, 2025]
- Staten Island Republican fires chief of staff over alleged text comments, including I love Hitler - SILive.com - October 15th, 2025 [October 15th, 2025]
- 'I love Hitler': The internal correspondence of young Republican politicians - Ynetnews - October 15th, 2025 [October 15th, 2025]
- Yale researcher says Republican funding proposal could cost thousands of lives - Connecticut Public - October 15th, 2025 [October 15th, 2025]
- Republican Bill Aims to Make Trump's Bitcoin and Crypto 401K Order Federal Law - Yahoo Finance - October 15th, 2025 [October 15th, 2025]
- How Wesley Hunt's entry into the Texas Senate race impacts Republican primary rivals Cornyn and Paxton - CBS News - October 13th, 2025 [October 13th, 2025]
- Analyzing Dominion Voting Systems sale to firm run by ex-Republican elections official - NPR - October 13th, 2025 [October 13th, 2025]
- LEADER JEFFRIES ON MSNBC: WE NEED TO ADDRESS THIS REPUBLICAN HEALTHCARE CRISIS - Congressman Hakeem Jeffries (.gov) - October 13th, 2025 [October 13th, 2025]
- LEADER JEFFRIES: "THIS HAS BEEN AN ALL-OUT REPUBLICAN ASSAULT ON THE HEALTHCARE OF THE AMERICAN PEOPLE" - Democratic Leader Hakeem Jeffries... - October 13th, 2025 [October 13th, 2025]