At a forum last week, Bradley Borden, an associate professor at Washburn University School of Law, delivered a low-key, 16-page lecture that is bound to provide talking points for those fighting against further cuts to the state budget.

Borden didn’t say it like this, but his message essentially was that the Kansas tax system is out of whack with the needs of our society, and tax cuts for some turn into tax hikes for others.

Borden’s thesis isn’t how much we should tax, but what we should tax.

“Unfortunately, public finance discussions often focus solely on tax rates. The focus should, however, include thoughtful analysis of tax bases,” he said.

For example, the state sales tax of 5.3 cents per dollar produced $3 billion in revenue on $57 billion of sales in 2008.

But $75 billion in sales was exempt from the tax. If those had been taxed, the state sales tax rate could have been lowered to 2.3 cents per dollar to raise the same $3 billion.

Borden is not advocating that the state sales tax be applied to everything, but, he said, “Undoubtedly, many sales tax exemptions do not help increase the tax base, and we should repeal them.”

Tax exemptions, he argues, should be scrutinized to the same extent as appropriations because in reality the exemptions are expenditures.

Everyone benefits from state services, such as roads, security, schools and the social safety net. When one area of commerce is exempt from being taxed to support that system, “the exempt amounts are economically equivalent to state direct expenditures and subsidies, and we should treat them as such,” Borden said.

The exemptions benefit a small portion of the population but increase the tax burden on everyone else.

Borden calls tax exemptions “tax expenditures.”

“Tax expenditures are popular to beneficiaries because they do not appear in the state’s budget report as expenditures. Therefore, tax expenditures are comparable to off-balance-sheet financing that plagues the private sector. In short, tax expenditures allow people to secretly manipulate state finances,” he said.

So in short, according to Borden, when a politician brags about cutting taxes, or carving out a tax exemption, he or she should be asked to explain: Who is paying for that?