Must-Read: Yes. Steven Moore is incompetent. Why do you ask? For him to say that he was surprised at the fact that lots of people used the pass-through income loophole in the plan he sold Kansas Governor Brownback is for him to admit he has no business recommending policies to anybody:
Jared Bernstein: Kansas and the myth of trickle-down tax cuts: "This WSJ piece about the ongoing supply-side tax cut experiment in Kansas...
..a microcosm of the Trump tax plan, designed, in fact, by some of the same dubious characters.... Back in 2012, Gov. Brownback was persuaded by some of the same folks now advising Trump to sharply cut state income taxes and to fully exempt pass-through income (income from a business that you pass-through to your personal income tax).... As soon as I and every other tax wonk heard about the pass-through exemption, we concluded that the incentive to restructure as a pass-through entity would be irresistible.... Steve Moore, a key trickler that pushed the plan in Kansas, didn’t see that coming:
Sometimes it was legitimate, and sometimes it was a gaming of the tax system to pay the zero rate, so that loophole has to be closed. Unless you have some rules about this, people really will shift income and they’ll find ways to legally avoid paying tax, and that was never the intention.
Who’d a thunk it?
Moore is now a Trump adviser....
Suppose you tried to predict state job growth using just national job growth and a trend term. You’d get a decent fit, but to be clear, this is of course not a detailed, causal model, just a correlation exercise. So I ran such a model on Kansas, stopping the estimate in 2012. Then I forecast job growth after that based on actual, national data. National job growth handily tracks that of KA up until around when the tax cuts hit the scene.... But if facts could kill the trickle-down tax cut myth, it would be long dead. I harbor no illusions: there is no other economic policy I can think of that is both so actively pursued yet so clearly wrong...
