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Archive for Sunday, December 13, 2009

Governor may change tax code to shore up state budget, bring in more revenue

December 13, 2009

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— Gov. Mark Parkinson is playing his cards close to the vest on whether he will recommend a tax increase to help solve a budget crisis that has already resulted in record spending cuts.

But Kansas Secretary of Revenue Joan Wagnon, a member of Parkinson’s Cabinet, has gone public big-time in telling anyone who will listen that the state needs to change its tax system.

Wagnon, a former legislator and mayor of Topeka, has been championing a state advisory council’s recommendation to repeal some sales tax exemptions that cost the state $200 million and implement a moratorium on giving away tax breaks, which have been liberally granted in recent years.

Coming from a member of the governor’s Cabinet, Wagnon’s efforts would seem to indicate tacit approval from Parkinson.

“At this point, Governor Parkinson is evaluating all the options for his 2011 budget proposal,” said Parkinson spokeswoman Beth Martino.

The 2011 budget is what the Legislature will work on when the 2010 session starts in January.

Wagnon said that she is acting independent of Parkinson but that he knows what she is doing.

“But I don’t have any reason to believe that if we got this thing (the advisory council recommendation) passed he wouldn’t sign it; I’m not going to put anything out there that is going to get me fired,” she said.

Wagnon is a political veteran who was selected by former Gov. Kathleen Sebelius in 2003 to be secretary of revenue. She remained in that post earlier this year, when Parkinson was promoted from lieutenant governor to governor after Sebelius was chosen by President Barack Obama to lead the federal health and human services department.

Because of the worst revenue crisis since the Great Depression, Parkinson has cut the state budget on his own twice, and earlier in the year the Legislature implemented several other cuts. Parkinson has indicated he doesn’t want to cut any more — but that leaves open the question of how to bridge the budget shortfall.

The lines are being drawn between those seeking more cuts and those seeking repeal of tax exemptions or other tax changes to increase revenue.

Derrick Sontag, Kansas state director of the anti-tax group Americans for Prosperity, said recently more budget cuts are needed.

“It’s our hope once the legislative session starts, that the governor doesn’t bow to the demands of taxpayer-funded lobbyists calling for tax increases in this difficult economic time for Kansans, but that he is willing to take an even closer look at our state expenditures and propose additional cuts where necessary,” Sontag said.

Wagnon said, however, the Legislature needs to debate tax policy.

And, she added, “When the governor puts his budget together, he will make his choice on what direction he will recommend. Those will be my marching orders, but right now I am working pretty independently.”

Comments

Centerville 5 years ago

Wagnon is a tax-first-make-excuses-later bureaucrat. I hope Parkinson is smart enough to politely ignore her advice.

Bob_Keeshan 5 years ago

It isn't just sales tax exemptions that need to be reformed. The entire tax code in Kansas places too much burden on the working class and is susceptible to boom/bust cycles.

It would be so easy to reform the entire system of taxation and actually cut taxes for 90% of Kansans while raising additional revenue for the state.

Unfortunately, too many people like AFP and Sontag are mortally convinced that the only Kansans who matter when it comes to tax policy are the 10% who are benefiting the most from it right now.

Richard Heckler 5 years ago

Abolish the Free Lunch! YES!

http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

Lawrence Taxpaying Voters should weed out the city hall “Free Lunch” program:

Here’s what happens. And this is a good example of where the news media hasn’t done a good job. I have tons of news clips that say, oh, this new shopping mall is coming or a new Wal-Mart or a new Cabela’s store, and thanks to tax increment financing, this store is going to be built. Well, what is tax increment financing?

I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it’s important to think about this. One is, that means your kid’s schools, your police department, your library, your parks are not getting that money. And you’ll notice we keep saying we’re starved for money.

We’re twice as wealthy as we were in 1980, but we’ve got to close hospitals, and we’ve got to close schools, and we don’t have money for all sorts of things like after-school programs, even though we’re twice as wealthy.

The second thing to think about is, imagine that you own Amy Goodman’s or Juan’s department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will.

And I tell about a man named Jim Weaknecht who owned a little store in the Poconos of Pennsylvania. He sold fishing tackle, hunting gear, stuff like that. And the way he made his living in his little tiny store, enough that he was able to have his wife stay at home and raise their three kids full time, was by charging less than a company called Cabela’s. Well, then Cabela’s came to town. This little city of 4,000 people made a deal to give Cabela’s $36 million to build a store. That’s more than the city budget for that town for ten years. It’s $8,000 for every man, woman, and child in that town to have this store. And even though he charged lower prices, he was pretty quickly run out of business.

That’s not market capitalism, which is what Ronald Reagan said he was going to bring us. He said, you know, government’s the problem, we need markets as a solution. Well, that’s not the market. That’s corporate socialism. And what we’ve gotten is corporate socialism for the politically connected rich—not all the rich, the politically connected rich—and market capitalism for everybody else.

bailoutnation 5 years ago

U.S. = Free Market SOCIALISM - Where the Government picks winners and losers, not the natural, capitalistic free-market forces.

wastewatcher 5 years ago

Madam Secretary What has caused you to change your stripes, previously you were a tax break champion to all of your and Sebelius' friends. You both are to blame for the fix we are in. Please provide some specifics and we will see whose breaks are in your sights, I bet they are not your Topeka croonies.

Alexander Neighbors 5 years ago

Like I said here is a perfect example of officials. Agressivily panhandeling

SettingTheRecordStraight 5 years ago

Despite Rothschild's best efforts at convincing us otherwise, sales tax exemptions don't "cost the state." Sales tax exemptions keep more money in the citizens' pockets.

Additionally, Americans for Prosperity is not "anti-tax." That's a term used widely by the Mainstream Media to besmirch groups like AFP who call for lower taxes and a halt to government growth.

commuter 5 years ago

Anothr reason the state is havoin gissues is they do not communicate what the law. How many people have bought somthing over the internet??? Of those how many people were charged sales tax??? If you were not charged sales taxm you are required to file an use tax form (sales tax by another name) and file and send in the amount on the orm to the state.

Now Merrill, how many tims hav you dones this?? I am guessing non, you probally buy stuff on th internet, not get charged sale stax and assume that it is ok..

Stuart Evans 5 years ago

or we could tax and regulate legal marijuana sales to adults. This would cut our law enforcement, court & societal cost, as well as increase tax revenue, open up local business opportunities, and decimate the black market. That in turn would reduce funding for gangs and the continued export of American dollars to south of the border. This only deals with the smoked portion of the plant. Additional revenue would be produced from the sale of hemp. In fact, it would create multiple new business opportunities, all of which would hire employees, pay taxes, and stimulate the economy.

kansasmutt 5 years ago

One answer to local tax base increase is for people to shop local small mom & pop stores. 99% of them have as good of prices or better for the everyday items we all seek.Those big box stores have great leader items, but who walks in the door for one item ? Most walk out with other things and pay 20% more than the little store down the street. You have to shop local to fight the wrath of big box takeovers.Too many people just go to the big box store and dont look at the big picture of what they spend. It IS cheaper to shop small local shops........ Plus you become a friend of the mom & pop stores and they can give you a discount on things the box stores cant. Try it and you`ll see it is a better way to shop and save. Heck, i buy from mom & pop stores and save lots on Labor charges and items i really want, they negotiate with you on prices. Shop small and save BIG $$$$$$

Bob_Keeshan 5 years ago

SettingTheRecordStraight (Anonymous) says…

Additionally, Americans for Prosperity is not “anti-tax.” That's a term used widely by the Mainstream Media to besmirch groups like AFP who call for lower taxes

You can't make this stuff up. Will there be a funnier line posted on the LJ World? Ever?

I wonder, what other description for groups who call for lower taxes would be appropriate? The first place you should make your suggestion is to the Mainstream Media website Kansas Liberty.

On that site, AFP, its supporters, and other groups like AFP are frequently identified as anti-tax groups.

You will then want to make the suggestion to AFP Kansas' blog where they proudly hail anti-tax activities by referring to them as anti-tax.

avoice 5 years ago

From Derrick Sontag: “It’s our hope once the legislative session starts, that the governor doesn’t bow to the demands of taxpayer-funded lobbyists calling for tax increases in this difficult economic time for Kansans..."

So, it's those pesky tax-payers who are wanting to pay more taxes. Got themselves some lobbyists now and they're trying fighting to increase their taxes (and ours, too). Don't let them get away with it!

Sigmund 5 years ago

merrill (Anonymous) says… Abolish the Free Lunch! YES! Lawrence Taxpaying Voters should weed out the city hall “Free Lunch” program: Here’s what happens."

Tax increment financing is not the same as sales tax exemptions. The least you could do is find a relevant article to cut and paste.

These are not sales tax exemptions for businesses, these are exemptions are for consumers who buy from these businesses and then don't have to pay the sales tax on their purchases. The businesses are simply exempt from collecting sales tax from the consumer and then remitting the taxes to the state.

Sigmund 5 years ago

kansasmutt (Anonymous) says… "One answer to local tax base increase is for people to shop local small mom & pop stores. 99% of them have as good of prices or better for the everyday items we all seek."

The higher the price you pay for goods, the more you pay in sales taxes. The "solution" is to search out the highest price and pay that, it doesn't much matter if the store is local or not. One way to encourage people to shop locally is to reduce the local sales tax, but you should have thought about that before you voted to increase the "local" sales tax.

Blessed4x 5 years ago

kansasmutt (Anonymous) says… “One answer to local tax base increase is for people to shop local small mom & pop stores. 99% of them have as good of prices or better for the everyday items we all seek.”

This has definitely NOT been my experience on the whole. Could you please provide proof of this statement? I assume that since you gave a specific stat that you have some kind of proof to back up your claim. I would love to see it so that I may adjust my purchasing accordingly.

Boston_Corbett 5 years ago

commuter (Anonymous) says…"Another reason the state is having issues is they do not communicate what is the law. How many people have bought something over the internet???..."


I, for one, firmly believe people who are in the business of "guerrilla internet marketing" should collect and remit sales taxes for the various "spam-kits" he sells.

Yes, this means you, Mario.

situveux1 5 years ago

avoice: When AFP refers to taxpayer funded lobbyists, they mean cities, counties & school districts that take tax money from everyone & use it to pay lobbyists to go to Topeka & ask for more money.

By your definition, every lobbyist is a taxpayer funded lobbyist.

I personally agree with Wagnon that exemptions should be done away with. The problem is Wagnon wants them done away with so the state gets more money while I'd like to see them done away with so everyone could benefit from a tax break, rather than just a few.

Godot 5 years ago

Ireland also is facing a budget crisis. Parkinson should consult with Ireland's finance minister Brian Lenihan, who announced that 400,000 state workers will see pay cuts ranging from 5 to 20 per cent, and that welfare and healhcare programs will see cuts. Sales tax will be reduced by .5 per cent on most goods, and even more than that on alcoholic beverages. A new tax will be imposed on fuel, which is contrary to the goal of creating job growth. But, it looks like Ireland is being proactive in reducing the cost of government in order to increase job growth.

http://www.newser.com/article/d9cfufv00/ireland-unveils-record-euro4-billion-6-billion-budget-cut-slashes-salaries-taxes-fuels.html

preebo 5 years ago

Good. At least there is a dialogue. What people here, and many in Politics, fail to understand is there is a cavernous gap in the differences between campaigning and politicking and actually governing.

Sigmund 5 years ago

commuter (Anonymous) says…”Another reason the state is having issues is they do not communicate what is the law. How many people have bought something over the internet???…”

To finish the question "...and failed to pay their fair share of sales taxes under the Kansas Compensating Use Tax." Individual Kansas consumers buying goods in other states or through catalogs, mail-order companies, over the Internet, or from television, magazine or newspaper advertisements MUST pay Kansas Consumers Compensating Use Tax on these purchases if the seller does not charge a tax of at least 5.3%. You can bookmark the link to the forms so it they are handy next April. http://www.ksrevenue.org/pdf/forms/ct10u.pdf

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