Kansas Offers Cautionary Tale for Trump's Tax Ambition

The governor of Kansas has some wisdom for Donald Trump, from one Republican tax-cutter to another: The reductions may take longer than expected to give the economy a sustained lift.

Like President-elect Trump, who said on the campaign trail that slashing taxes would jump-start growth, Sam Brownback in 2012 said steep cuts to personal income and small-business taxes in the Midwest state would provide the economy a``shot of adrenaline." What followed wasn't the promised jolt. The shortfall in revenue has instead forced the government to curtail spending on everything from health care to higher education.

"A guy has got to feel money in his pocket" before getting confident enough to spend more, which would boost economic growth, Brownback said in an interview. "We've seen people put up buildings that they wouldn't have otherwise with this money. That will then generate more, but that takes time."

Brownback's experiment offers a cautionary tale for Trump, who has placed tax reform as a central part of his strategy to more than double the pace of economic growth and add millions of well-paying jobs to the labor force.

Brownback's critics say the state's experience could offer an even starker warning to the incoming administration, as they blame many of its recent economic woes on tax cuts. Since the governor approved a reduction in personal income taxes and cut non-wage business income taxes for small-business owners in 2012, Kansas has fallen behind the national average in terms of job creation and personal income growth, according to data compiled by Bloomberg.