Archive for Thursday, November 19, 2009

Official: Repealing tax exemptions would help finance state services

Exemptions since ’95 have taken $10.9B from state treasury, leader says

November 19, 2009


— A top official in Gov. Mark Parkinson’s administration on Wednesday said Kansas needs to repeal some tax exemptions to provide the revenue needed to fund crucial state services.

Kansas Secretary of Revenue Joan Wagnon said tax exemptions granted by state elected leaders since 1995 have shorted the state treasury $10.9 billion. Wagnon’s comments came during a forum at Washburn University.

Meanwhile, tax revenue shortfalls this year have resulted in several rounds of budget cuts, and Parkinson is expected to cut another $260 million next week.

“In a time of financial crisis, you don’t give away your revenue,” Wagnon said.

Wagnon is advocating a repeal of sales tax exemptions aimed at giving specific organizations a tax break. If repealed, that would produce more than $200 million in taxes.

She also called on the Legislature to enact a three-year moratorium on any new property or sales tax exemptions or income tax credits.

Parkinson has said he would not consider tax issues until he starts working on the next fiscal year’s budget.

Shannon Jones, executive director of the Statewide Independent Living Council of Kansas, said tax cuts have taken money away from helping those with disabilities.

Currently more than 3,000 people are on waiting lists to receive services in their homes and communities and to keep them out of nursing homes, Jones said.

“The Kansas state budget cannot sustain any more cuts,” Jones said. “There is no more meat on the bone to cut.”

Bradley Borden, an associate professor of law at Washburn University, said the state’s numerous tax exemptions and credits have choked off revenue to pay for state services and increased the tax burden on everyday Kansans.

In 2008, the state sales tax applied to $57 billion in sales, but $75 billion in sales was exempt from the tax.

And, he said, many of the tax exemptions are unfair. For example, he said, a young couple starting a family must pay sales tax on baby formula, diapers, food and clothing. Meanwhile, a person who buys male-enhancement drugs is not subject to the state sales tax.

“The repeal of tax expenditures could thus broaden the tax base, reduce the tax burden most of us bear, and more fairly allocate the tax burden,” he said.


Brent Garner 8 years, 5 months ago

Why not just simplify the tax code? Establish a basic level, say at the poverty line, below which income is not taxed, and then set a basic percentage tax on all income above that line. That way we offer the poor a break in the hope that said break will help at least some of them break out of poverty and the tax burden is borne equally by all.

just_another_bozo_on_this_bus 8 years, 5 months ago

I find endlessly amusing the Republican view that in an economic system that is, by design, inherently unfair, the tax system for the wealthy must be "fair."

Godot 8 years, 5 months ago

I say any government official, elected or not, who view a tax exemption or tax cut as "lost revenue" should be fired. I view a tax exemption as a few dollars that remained in the rightful owners' hands, safe from government extortion.

just_another_bozo_on_this_bus 8 years, 5 months ago

Don't worry, consumer1, you're clearly immune to rational thought.

SettingTheRecordStraight 8 years, 5 months ago

Whenever Rothschild uses the term "tax cuts," replace it with "tax relief."

Whenever Rothschild uses the term "revenue," replace it with "taxes and fees."

true_patriot 8 years, 5 months ago

A balanced budget is an equation: Revenue = Expenses. There is nothing special about either side, and both are equally important. Kansas has been excessively cutting expenses to critical core services while simultaneously cutting revenue with tax exemptions and the phase-out of the estate tax, lax enforcement of corporate tax collection, etc. Cutting revenue while cutting expenses shows extremely poor fiscal judgement, and now that we have an economic "downturn" (i.e. depression) piled on top, that poor fiscal management is getting ugly, as the revenue is way under the minimum required but all the cuts to services do serious economic damage to Kansas in the short term, medium term, and long term.

As far as "flat" income tax, there is no such thing. The reason we have a progressive (higher percentage of higher incomes) income tax structure is to offset all the other regressive (higher percentage of lower incomes) taxes we pay. The only way to have a flat income tax would be to have all the taxes we pay to be flat, but that's simply not feasible - there's no way to figure taxes as a percentage of the customer's income in line at the hardware store or at the gas pump.

Of course you have to manage the revenue side just as aggressively as the expenses side. If you decide to quit your job while

true_patriot 8 years, 5 months ago

If you decide to quit your job while cutting health care, house payment, car payment, utilities, you won't end up with any more cash in your pocket but your family will likely be sick and homeless before long.

staff04 8 years, 5 months ago

Thank you, John Madden, for this headline.

SettingTheRecordStraight 8 years, 5 months ago

True Patriot,

Your definition of "critical core services" is undoubtedly far more permissive than most of us would agree to. You probably view the emp-T as a "critical core service," no? How about Lawrence Parks and Rec kickball leagues?

Sure, these are examples of city "services," but they represent the ridiculous levels of government waste that exist in our state and that need to be eliminated permanently. So when we look at Lawrence Free State's palacial campus, you'll get no sympathy from those of us with common sense enough to understand waste when we see it.

just_another_bozo_on_this_bus 8 years, 5 months ago

"It is pretty simple, just make people work. "

For whom? Doing what? Paid with whose money?

Gecko 8 years, 5 months ago

If any investigative news reporter was really worth their salt, we'd all see Gov. Mark Parkinson and Kansas Secretary of Revenue Joan Wagnon on the NATIONAL NEWS, red-faced as they attempt to explain why there exists ZERO point-of-sale computer data tracking on any sales tax exempt transactions. It's true. Each and every single one of us could, at this very moment, simply fill out a sales tax exemption form with the Dept of Revenue, claim we own a business (that does not exist), be assigned a sales tax exempt number, then go to any store and fill out their sales tax exempt form and either get a card or be entered into their system for all future purchases. Each future transaction we make, we pay ZERO sales tax. The State of KS never has had ANY IDEA as to ANY of those individual transactions that sales tax was not collected. The State of KS is only interested in going after the EASY collection of tax. That's payroll taxes from working folks, and people who haven't a clue they don't have to pay sales tax at the store. This would be a pretty major National news story, if only a motivated reporter existed.

purplesage 8 years, 5 months ago

I'm tired of taxes - and the endless whining about government services being cut. Wages are frozen - at my place of employment - and I have to shoulder a larger portion of an increasingly wimpy health insurance plan. The politicinas in Washington age building a welfare state, full steam. They aren't telling us the truth about jobs created / saved - in fact, it looks grossly exaggerated.

We cannot prosper when taxes and other expenses go up and wages stay flat or decrease. The family budget is not able to sustain the current obligations being shifted onto it.

pace 8 years, 5 months ago

good idea, the conservative will worry the corporations they represent might not have enough money to pay them off if we ask if the special ones pay a fair share of taxes.

Bob_Keeshan 8 years, 5 months ago

Godot (Anonymous) says…

I say any government official, elected or not, who view a tax exemption or tax cut as “lost revenue” should be fired. I view a tax exemption as a few dollars that remained in the rightful owners' hands, safe from government extortion.

Funny, most people would view a tax exemption as a way for one person to avoid paying taxes while the rest of us carry a greater load.

The few dollars that remained in the rightful owners' hands is a few dollars the rest of us have to pay. I guess it depends on whose side you are one - the side of the people or the side of the gilded class. Godot has obviously already decided.

tbaker 8 years, 5 months ago

Note the logic this politician uses:

“In a time of financial crisis, you don’t give away your revenue,” Wagnon said. I can see him saying it, much like a feudal lord addressing his serfs. The translation is "In time of financial crisis, you don't allow the people who go out and work to keep what they earn. The state should be given that money."

Never forget folks this money these pinheads are talking about does not belong to them / the State of Kansas. It belongs to us. We earned it, and they take it from us by threat of force. They assume all these things they spend it on must be done. They believe letting us keep what we earn is far less important than being able to sustain some government function. See where we rate in the equation? Their default setting is supposed to be in our favor - not the government's.

Just once I would like to see one of these politicians stand up and say "I will not call for citizens to pay another dime in taxes until every single un-funded federal mandate is shut down, and until every single un-constitutional program or agency of state government is shut down."

wastewatcher 8 years, 5 months ago

Great that Secretary Wagnon has suddenly got tax religion when her ex boss,Sebelius, and her led the charge for so many tax breaks during the past seven years. Lets get a scorecard of what thet gave away, this represents a real dramatic change.

Richard Heckler 8 years, 5 months ago

Do tax exemptions = tax increases on all those that do not qualify for the exemptions? No doubt some do.

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