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
- Colorado primary for governor: Meet the Democratic and Republican candidates - Colorado Springs Gazette - June 16th, 2026 [June 16th, 2026]
- Former Chairwoman of the Lynchburg Republican City Committee speaks on primary nullification - WSLS - June 16th, 2026 [June 16th, 2026]
- Former Vice President Pence on His New Book and the Republican Party Outlook - C-SPAN - June 16th, 2026 [June 16th, 2026]
- Baldwin Calls on Republican Leaders to Bring Bipartisan Bill to Cap Insulin at $35 Up for a Vote - Urban Milwaukee - June 16th, 2026 [June 16th, 2026]
- Judge Dismisses Republican Groups Case Against the University of Florida - The New York Times - June 16th, 2026 [June 16th, 2026]
- Congressman Mfume Statement on Republican Passage of ICE & CBP Funding via Reconciliation - Representative Kweisi Mfume | (.gov) - June 16th, 2026 [June 16th, 2026]
- Republican voucher initiative would override voters' approval of others - PinalCentral.com - June 16th, 2026 [June 16th, 2026]
- Senate Republican on FISA holdup: Stop playing the politics - Senator Shelley Capito (.gov) - June 16th, 2026 [June 16th, 2026]
- Republican Need Some Serious Thought Into Whats Next - The Newnan Times-Herald - June 16th, 2026 [June 16th, 2026]
- Republican Peter Soul advances to the general election for U.S. House in California's 16th Congressional District - Caledonian Record - June 16th, 2026 [June 16th, 2026]
- Republican decision on secretary of state race could also show reach of Banks influence - The Republic News - June 16th, 2026 [June 16th, 2026]
- Q&A: Meet the Republican candidates vying for Colorado Governor - SummitDaily.com - June 12th, 2026 [June 12th, 2026]
- Republican Greg Cunningham on the border, Trump and big money in the N.M. CD2 race - Santa Fe New Mexican - June 12th, 2026 [June 12th, 2026]
- 'I wont vote for Ken Paxton': Former GOP official breaks with party in ad to play during Texas Republican convention - Spectrum News - June 12th, 2026 [June 12th, 2026]
- Times Opinion: This is the Hamilton County budget you get under Republican rule - Chattanooga Times Free Press - June 12th, 2026 [June 12th, 2026]
- Carter supports House Republican passage of life-saving ICE, Border Patrol funding - U.S. Representative Buddy Carter (.gov) - June 12th, 2026 [June 12th, 2026]
- Trump pardons former Republican congressman convicted of insider trading - PBS - June 12th, 2026 [June 12th, 2026]
- Evette and Wilson Advance to Runoff in South Carolina Republican Primary for Governor - The New York Times - June 12th, 2026 [June 12th, 2026]
- In Nevada, Trumps policies are making things tough for Republican Gov. Joe Lombardo - NPR - June 12th, 2026 [June 12th, 2026]
- How the political typology groups feel about the Republican and Democratic parties - Pew Research Center - June 12th, 2026 [June 12th, 2026]
- Beshear slams Louisville Republican for medical cannabis attack: 'I think they think it's masculinity' - WHAS11 - June 12th, 2026 [June 12th, 2026]
- A quick look at the Colorado governor candidates running in this months Democratic, Republican primaries - The Denver Post - June 12th, 2026 [June 12th, 2026]
- These Republican Lawmakers Challenged Abortion Bans. Then They Faced Backlash. - ProPublica - June 12th, 2026 [June 12th, 2026]
- Ousted Republican Heather Hill re-enters governors race as write-in candidate - NBC4 WCMH-TV - June 12th, 2026 [June 12th, 2026]
- 5 Big Moments in the Texas Republican Senate Race - The New York Times - May 27th, 2026 [May 27th, 2026]
- Trump is getting the Republican Party that he wants. But can he win in the midterms? - The Seattle Times - May 27th, 2026 [May 27th, 2026]
- What to expect in the Texas US Senate Republican primary runoff - PBS - May 27th, 2026 [May 27th, 2026]
- Ken Paxton Wins the Senate Republican Primary Runoff in Texas - The New Yorker - May 27th, 2026 [May 27th, 2026]
- MAP: How Bexar County and Texas voted in the U.S. Senate Republican primary runoff - KSAT - May 27th, 2026 [May 27th, 2026]
- 5 Things to Know About Ken Paxton, the Republican Senate Nominee in Texas - The New York Times - May 27th, 2026 [May 27th, 2026]
- Democratic Incumbents Run Against Each Other After Republican Redistricting in Texas - The New York Times - May 27th, 2026 [May 27th, 2026]
- Americas ugliest primary? Texas Republican infighting could hand Senate seat to Democrat - The Guardian - May 27th, 2026 [May 27th, 2026]
- State Republican convention headed for Duluth - Duluth News Tribune - May 27th, 2026 [May 27th, 2026]
- WATCH: Would Republican candidates for SC governor want to appoint judges? Heres what they said. - WIS News 10 - May 27th, 2026 [May 27th, 2026]
- Republican-Appointed Judges Just Gave the Roberts Court a Stunning Rebuke - Mother Jones - May 27th, 2026 [May 27th, 2026]
- WATCH: Republican candidates for SC governor speak on failed redistricting push, loyalty to Trump - WIS News 10 - May 27th, 2026 [May 27th, 2026]
- Republican attorneys general split with House party members over US social media bill - Reuters - May 27th, 2026 [May 27th, 2026]
- Trump is getting the Republican Party that he wants. But can he win in the midterms? - Yahoo - May 27th, 2026 [May 27th, 2026]
- Republican Rep. Mike Flood Jeered at Another Contentious Nebraska Town Hall - News of the United States - NOTUS - May 27th, 2026 [May 27th, 2026]
- Read the DOJ's memo to Republican senators on how Trump's $1.8 billion 'anti-weaponization' fund will work - PBS - May 22nd, 2026 [May 22nd, 2026]
- Trump exerts iron grip on Republican Party with Massie defeated - BBC - May 22nd, 2026 [May 22nd, 2026]
- Blanche thrust into Republican firestorm over $1.8B fund as he seeks to prove his loyalty to Trump - KSAT - May 22nd, 2026 [May 22nd, 2026]
- Blanche at center of Republican firestorm over $1.8B fund as he seeks to prove his loyalty to Trump - Inquirer.com - May 22nd, 2026 [May 22nd, 2026]
- Congress delays vote on Republican-backed ICE funding after GOP infighting - KUOW - May 22nd, 2026 [May 22nd, 2026]
- Tommy Tuberville wins Republican nomination for Alabama governor - ESPN - May 22nd, 2026 [May 22nd, 2026]
- Greg Dolezal and John F. Kennedy advanced from the May 19 Republican primary for lieutenant governor of Georgia to the June 16 primary runoff -... - May 22nd, 2026 [May 22nd, 2026]
- Republican announces write-in campaign for seat held by late Rep. Liz Conmy - InForum - May 22nd, 2026 [May 22nd, 2026]
- Blanche at center of Republican firestorm over $1.8B fund as he seeks to prove his loyalty to Trump - AP News - May 22nd, 2026 [May 22nd, 2026]
- Thomas Massie - Republican who stood up to Trump is hoping for big win against president - BBC - May 22nd, 2026 [May 22nd, 2026]
- Trumps revenge tour may have sparked a Republican revolt - MS NOW - May 22nd, 2026 [May 22nd, 2026]
- It will be a very difficult cycle for a Republican to hold on. - KTAR News 92.3 FM - May 22nd, 2026 [May 22nd, 2026]
- Blanche at center of Republican firestorm over $1.8B fund as he seeks to prove his loyalty to Trump - Caledonian Record - May 22nd, 2026 [May 22nd, 2026]
- Republican party infighting spills over to Montana's legislative primaries - Montana Public Radio - May 22nd, 2026 [May 22nd, 2026]
- Blanche at center of Republican firestorm over $1.8B fund as he seeks to prove his loyalty to Trump - dailyrecordnews.com - May 22nd, 2026 [May 22nd, 2026]
- Sen. Bill Cassidys defeat shows the price of dissent in Trumps Republican Party - NBC News - May 17th, 2026 [May 17th, 2026]
- Polls vs prediction: The Kentucky primary testing Trump's influence in Republican party - TRT World - May 17th, 2026 [May 17th, 2026]
- Why Trump is going to war with Kentuckys rebellious Republican - The Times - May 17th, 2026 [May 17th, 2026]
- This Republican voted to convict Trump. Now he's up for reelection. Can he survive? - NPR - May 17th, 2026 [May 17th, 2026]
- Sen. Cassidy knocked out of Louisiana Republican primary as Trump-backed Letlow, Fleming make runoff - AP News - May 17th, 2026 [May 17th, 2026]
- Trump's revenge tour continues with ouster of Republican Sen. Bill Cassidy - WBAL-TV - May 17th, 2026 [May 17th, 2026]
- Georgia Senate race tests Gov. Brian Kemps sway in the Republican Party - NBC News - May 17th, 2026 [May 17th, 2026]
- All three branches of government should have a stock trading ban: House Republican - The Hill - May 17th, 2026 [May 17th, 2026]
- CT Republican convention opens with congressional nominations after governor race shake-up - CT Insider - May 17th, 2026 [May 17th, 2026]
- Gail Symons: The Difference Between The 1994 And 2026 Republican Platform - Cowboy State Daily - May 17th, 2026 [May 17th, 2026]
- A Top Connecticut Republican, Accused of Fraud, Ends Her Bid for Governor - The New York Times - May 17th, 2026 [May 17th, 2026]
- Trump Gets Revenge on Republican Who Voted to Convict Him - Yahoo Finance - May 17th, 2026 [May 17th, 2026]
- Colorado county Republican chair arrested in sting on allegations he tried to pay for sex with a child - Colorado Springs Gazette - May 17th, 2026 [May 17th, 2026]
- Cornyn and Paxton battle for Republican nomination, abortion pill ruling sparks Texas reaction - CBS News - May 17th, 2026 [May 17th, 2026]
- Trump Gets Revenge on Republican Who Voted to Convict Him (1) - Bloomberg Government News - May 17th, 2026 [May 17th, 2026]
- Democratic spokesperson's advice to the Republican Party: 'Learn from the Biden Administration' - CNN - May 17th, 2026 [May 17th, 2026]
- Republican candidates sue to block unaffiliated voters from participating in June primary - Colorado Newsline - May 11th, 2026 [May 11th, 2026]
- In win for voters, Montana court blocks Republican-backed attack on Election Day registration - Democracy Docket - May 11th, 2026 [May 11th, 2026]
- What makes a good teacher? Ask a Republican and a Democrat, and they are likely to agree - The Conversation - May 11th, 2026 [May 11th, 2026]
- 2026 Primary Election: Two Candidates Look for the Republican Nomination in House District 3 - Flathead Beacon - May 11th, 2026 [May 11th, 2026]
- Idahos Republican civil war intensifies as the primary election draws near - Idaho Education News - May 11th, 2026 [May 11th, 2026]
- Iowa politics: KCCI's full interview with Eddie Andrews, Republican candidate for governor - KCCI - May 11th, 2026 [May 11th, 2026]
- Netflix Sued by Republican Texas Attorney General, Who Alleges Service Is Spying on Users and Is Designed to Be Addictive - Variety - May 11th, 2026 [May 11th, 2026]
- G.O.P. Fatigue in Iowa Strains the Republican Primary for Governor - The New York Times - May 11th, 2026 [May 11th, 2026]
- House Republican Proposes Bill to Wind Down the Iran War - The New York Times - May 7th, 2026 [May 7th, 2026]
- Another House Republican is under the microscope for alleged sexual misconduct - Politico - May 7th, 2026 [May 7th, 2026]