Why It’s So Hard to Portray Kansas as an Economic Miracle

Weigel
Reporting on Politics and Policy.
Aug. 1 2014 10:56 AM

Why It’s So Hard to Portray Kansas as an Economic Miracle

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Oz has yet to be found

Photo by Justin Sullivan/Getty Images

A month ago, the Heritage Foundation's chief economist Steve Moore penned a syndication-ready column designed to debunk a popular lefty meme—that Kansas' regressive tax cuts were killing the state and overturning dogmas. The meat of the column was a collection of data meant to prove that, during the recession, high-tax states performed far worse than low-tax states.

No-income-tax Texas gained 1 million jobs over the last five years; California, with its 13% tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. Oops. Illinois raised taxes more than any other state over the last five years and its credit rating is the second-lowest of all the states — below that of Kansas!
For those who don't believe all of this, here are the numbers for job creation in the four largest states over the last 20 years: Texas up 49%, Florida up 35%, California up 19%, New York up 4%.
If you want to rent a moving van to go from San Diego to Austin, you will pay about three times more than the reverse trip. Why? No-income-tax Texas is the new California — where everyone wants to go.

You can read Deron Lee to find out what happened next. The Kansas City Star ran this column, after it had been run in conservative media. When composing a response, Yael Abouhalkah ran the data and found that Moore had blown it. "Texas did not gain 1 million jobs in the 2007-2012 period Moore measured," wrote Abouhalkah. "The correct figure was a gain of 497,400 jobs. Florida did not add hundreds of thousands of jobs in that span. It actually lost 461,500 jobs. New York, with it very high income tax rates, did not lose jobs during that time. It gained 75,900 jobs."

How did Heritage clean this up? With another version of Moore's column that simply widened the magnifying glass. The new grafs.

In the 5 year period beginning in December of 2007 (the month the last recession started), no-income-tax Texas gained roughly half-a-million jobs, while California managed to lose approximately the same amount. 
When looking at the long-term jobs data (from 1990-May 2014), the two big no-income-tax states of Texas and Florida show job growth up 65 percent and 45 percent respectively.  These figures dwarf both California (up 24 percent) and New York (up only 9 percent). These are just a few examples of a long term, irrefutable trend as explained fully in my co-authored book, the Wealth Of States.  State policy dramatically affects job opportunities.
And despite Illinois raising taxes more than any other state over the last five years, its credit rating is the second lowest of all the states, below that of Kansas!

Just a few rejiggerings of the data, a fundamental shift in the argument, and Moore ended up where he started—arguing that states thrive when they don't collect income taxes or raise taxes. The mission to portray Kansas as a libertarian Oz-in-the-making goes on.

David Weigel is a reporter for Bloomberg Politics

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