| August 8, 2012

OCPA memo 'played a major role' in historic tax cut

In an October 2010 memorandum (“A Tale of Two States: The Real Effect of Individual Income Tax Cuts”), OCPA research fellow Steve Anderson noted that “recent tax policy in Oklahoma and Kansas gives us the closest thing possible to a controlled experiment.” After looking at the evidence, Mr. Anderson, an accountant who spent two years as a budget analyst in the Oklahoma Office of State Finance, concluded that “putting money back into the hands of Oklahoma’s private sector will generate economic activity and boost Oklahoma’s economy.”

The memorandum was effective. Anderson told me this week that it “played a major role” in persuading lawmakers in 2012 to pass the largest tax cut in state history.

In Kansas.

Gov. Sam Brownback, who hired Anderson to be his state budget director, used “his political capital and GOP majorities,” The Wall Street Journal noted approvingly, to press “a reform agenda worth the effort.” As the Journal pointed out in an editorial entitled “What's Right With Kansas,”

Governor Sam Brownback continued the post-2010 reform trend among GOP governors by signing the biggest tax cut in Kansas history. The plan chops the state income tax rate to 4.9% from 6.45% and eliminates income taxes on about 190,000 Kansas small businesses.

Unsurprisingly, small-business owners in Kansas are pleased with the elimination of the income tax, and Gov. Brownback is pleased to host economist Arthur Laffer and others for a panel discussion next week trumpeting this taxpayer victory.

For our part, as an organization committed to economic freedom, OCPA is pleased to know that our ideas are having an impact. Given last night’s electoral triumph in Kansas, it looks like Gov. Brownback is just getting started. We hope his success—like that of Gov. Scott Walker—will embolden conservative policymakers in all 50 states.

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