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Archive for Monday, April 30, 2012

Tax-cut would lead to state deficits

April 30, 2012, 7:01 a.m. Updated April 30, 2012, 4:21 p.m.

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— A tax-cut proposal endorsed by Gov. Sam Brownback remained in conference committee Monday as fiscal forecasts showed the measure would lead to state deficits.

The most up-to-date projection provided by Kansas Legislative Research Department showed deficits starting in 2015 and growing to $161 million by July 1, 2017.

An earlier projection showed the tax cuts would transform a $612 million surplus in the next fiscal year into a $911 million deficit in a little more than five years. But that, officials said, was based on an earlier version of the bill and lower revenue growth projections.

Despite the reduction in the projected deficit, opponents of the proposal said it would still produce huge problems for the state.

“We need to slow this process down,” said Sen. Tom Holland of Baldwin City, who is the lead Democrat in the Senate on tax issues.

Republicans on the House-Senate tax conference committee had agreed to the bill last week, but on Monday indicated more work needed to be done. The committee is scheduled to meet again today.

Democrats and some Republicans have endorsed a plan to follow current law and allow the state sales tax to decrease from 6.3 percent to 5.7 percent next year. They also have supported a plan aimed at providing $180 million in property tax relief over four years.

But Brownback, a Republican, and his supporters want to cut taxes more. Brownback has voiced approval of a plan to decrease income tax rates and phase out the non-wage income tax on nearly 200,000 businesses.

Brownback says the plan will boost the economy. Democrats say it will leave no revenue to adequately fund core services of state government.

According to the most recent projection provided by the Kansas Legislative Research Department, the tax cuts would start producing state budget deficits three years out.

But Sen. Les Donovan, R-Wichita, who is chair of the Senate tax committee, said the proposal, especially the exemption of non-wage business income proposed by Brownback, would jump start the state’s fiscal picture.

“What if the governor’s idea really does work,” Donovan said. “These numbers will be blown away,” he said.

On Friday, Brownback said he believed there would be enough revenue for the state budget. “The numbers look doable,” Brownback said. He said that he and the Legislature must “continue to be aggressive in holding our costs down.”

But Holland said there is no evidence to indicate the tax cuts will increase jobs and business activity.

Under the proposal, the three state income tax rates of 3.5 percent, 6.25 percent and 6.45 percent would be collapsed into two rates of 3 percent and 4.9 percent. The business tax elimination would be phased in over four years.

On Monday, both Donovan and House tax chair Richard Carlson, R-St. Marys, proposed ideas that would lengthen the phaseout of the business tax or temporarily set the top personal income tax rate at 5.1 percent as ways to reduce the projected budget deficits.

Democrats and some Republicans also have criticized the plan because it would eliminate or reduce several tax credits aimed at helping low-income Kansans. The measure would remove renters from the homestead property tax refund; repeal tax credits for child care and dependent care; and taxpayers who qualify for both the Earned Income Tax Credit and food sales tax rebate credit could only receive one of those credits.

Comments

bobberboy 1 year, 11 months ago

We need much stronger leadership from democrats and moderate republicans in the state of Kansas !! People get out and vote for them !! Browncrack is a clown !!

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Richard Heckler 1 year, 11 months ago

Worker's taxes siphoned off by their bosses

Thursday, April 26, 2012 | Posted by Jim Hightower

My congratulations to workers in 16 states – from Maine to Georgia, New Jersey to Colorado! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss.

Good Jobs First, a non-profit, non-partisan research center, has analyzed state programs meant to create jobs, but instead have created some $700 million a year in corporate welfare. This scam starts with the normal practice of corporations withholding from each employee's monthly check the state income taxes their workers owe.

But rather than remitting this money to pay for state services, these 16 states simply allow the corporations to keep the tax payments for themselves! Adding to the funkiness of taxation-by-corporation, the bosses don't even have to tell workers that the company is siphoning off their state taxes for its own fun and profit.

These heists are rationalized in the name of "job creation," but that's a hoax, too. They're really just bribes the states pay to get corporations to move existing jobs from one state to another, or they're hostage payments to corporations that demand the public's money – or else they'll move their jobs out of state.

Last year, Kansas used workers' withholding taxes to bribe AMC Entertainment with a $47 million payment to move its headquarters from downtown Kansas City, Missouri, to a KC suburb on the Kansas side, just 10 miles away. What a ripoff! Among the 2,700 corporations cashing in on such absurd diversions of state taxes from public need to private greed are Goldman Sachs, GE, Motorola, and Procter & Gamble.

For more information – and for ways you can help stop this despicable giveaway – get the full report, entitled "Paying Taxes to the Boss." It's available at www.GoodJobsFirst.org.

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Jayhawk1958 1 year, 11 months ago

I say we privitize all public services for the rich. Let them fund their own police and fire so we can reduce taxes for the 99%ers. They already pay for their own private schools, recreation, and entertainment. Their kids already play in private sports programs, not local government programs. Maybe the rich can participate in a co-op for water and sewer.

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Jayhawk1958 1 year, 11 months ago

All of this is fine and dandy, but I read no mention on creating jobs.

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autie 1 year, 11 months ago

Maybe we ought to privatize schools all the way then they could all be outcome based and provide healthy competition. Then the price could go up enough that only the deserving could atttend. That would fix all the problems.

Then lets privatized all the state parks. They could charge enough in fees to make a healthy profit and keep all the riff raff out of our state parks. That will teach them. And save the state millions. Lets privatize the highway system too...then the private contractor can charge us all fees to drive on their roads...that will save billions in state dollars...Oh, crap just send them all home, we don't need no stinkin government.

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tbaker 1 year, 11 months ago

Thanks Paul. I have no problem with the government providing so-called "core" services to the citizens. What I have a problem with is poor performance. If the majority of citizens want the state to provide something, then the politicians need to demand performance for the tax money being spent. For example, per-student spending in public schools has steadily risen over the last 40 years, yet virtually every measure of academic performance has steadily declined over the same period. Everyone agrees children need to get a good education, yet the facts say government is getting progressively worse at delivering it. I'm not for doing away with public schools, I'm for doing away with the politicians, school board members, tenured teachers and their union reps that are responsible for this decline, and finding people who understand how to reverse this trend and re-establish the standards we all expect. Part of the solution is giving parents the choice to vote with their feet and take their tax money with them. Competition works every time it is tried.

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tbaker 1 year, 11 months ago

Demagoguery is not a substitute for rational thought. Tax cuts do not cause budget deficits. The state spending more than it receives in revenue does. Those who disagree must then assume every penny of current spending is essential. Common sense says it isn't.

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JayhawksandHerd 1 year, 11 months ago

http://www.kansas.com/2012/04/30/2317197/new-estimate-lowers-deficit-of.html

Boy, that was fast! No worries, though. Now they're projecting "only" a $160 million shortfall by 2018.

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JackMcKee 1 year, 11 months ago

I have a better shot at POTUS than Sammy.

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mikekt 1 year, 11 months ago

I heard Gov. Sam talking on TV about the ground breaking for Cerner Corps' new headquarters at the Ledgends, in KCK, which will bring 4,000 jobs to KCK & he was touting how his proposed tax cuts, are going to bring lots of jobs to Kansas,... as if the NASCAR Track, Buffets' Nebraska Furniture Mart, The Legends Shops, Cerners Corps' new 4,000+ employee headquarters, had something to do with himself & his future tax plans, etc? Really? Are Gov. Sams' proposed tax cuts also responsible for bringing Googles' Expanded internet to KCK? Sam is like Chicken Man,"He's everywhere" & nobody would invest here without his tax cuts? Right? This kind of reminded me of when Al Gore invented the internet! I personally believe that Gov. Sam is out to pull a G.W. Bush on the state of Kansas. Say good-bye to Ks. State surpluses & hello to crippling deficits that will grow & grow till unmanageable.

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JayhawkFan1985 1 year, 11 months ago

The GOP is good for two things...

1) slash and burn of budgets.

2) imposing their Taliban style morality on everyone else while claiming to be for limited government.

WHAT'S THE MATTER WITH KANSAS?

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SnakeFist 1 year, 11 months ago

The problem with conservativism is that it focuses exclusively on individual rights and not at all on social obligations. Man hasn't been absolutely free and without obligations to his fellow man since he recognized the advantages of cooperation and agreed to the social contract.

The money you make is made within a system, and the system has to be maintained or you will stop making money. If, for example, the roads aren't maintained, then paying customers can't get to your business. Similarly, if future customers aren't sufficiently educated, then they won't have good jobs and money to spend at your business.

Conservatives are too short-sighted to see (or, at least, admit) any of this. They cry "mine, mine" like petulant children who have yet to learn the value of cooperation or that their success wasn't acheived in a vacuum without the contributions of others.

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Robert Burnham 1 year, 11 months ago

Why not re-look at this 4 years from now and see where we are as a state? This is the state that taxes us for " personal property"....are you kidding me!!!...the state has had their hands in our pocket for too long...I say, thank Mr Brownback ". I work damn hard for my money...if you want to fund the " arts ", do it out of your own pocket....the problem with most politicians is that they like to spend " our " money without any fiscal responsibility.....so again, thank you Mr Brownback!

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pace 1 year, 11 months ago

tax cuts lead to greater deficit, greater deficit will be met with more, cuts in service, cuts to education and destruction or sell off of state infrastructure, A rocket scientist could spell the trouble in Kochland economics but don't you know, Kochland is a matter of faith and the buck doesn't stop at the governor's office, it on the shuttle to the brothers.

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FalseHopeNoChange 1 year, 11 months ago

Why do people need government "thugs" like Browny to take my money to "trickle down" to them.

Can't they get their "own" "trickle"?

I am tired of these government "thugs" pimping me to give "my money" to people that can't get their own "trickle".

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KNUCKLEDRAGGER 1 year, 11 months ago

WHY DO STATE DEFICITS GO UP WITH TAX CUTS AND NOT FEDERAL DEFICITS ? Do you mean the Trickle Down , Supply Side Theory is a fraud ?

You have got to be kidding me !!!! I am shocked
The Reagan and Bush Tax Cuts did not help raise the Deficit ?

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Phillbert 1 year, 11 months ago

Surprising that even after they bumped the numbers they still get deficits. And when these deficits happen, we'll be told it is because we didn't cut taxes on businesses and the wealthy enough, so we must make even more cuts to schools, roads, health care, prison guards, etc. Plus we'll be told there's no choice but to raise taxes on poor people even more than this plan already will, and raise local property taxes when all the state cuts "trickle down" to the cities.

Deficits aren't a side effect of Republican policies, they're the intended outcome.

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bobberboy 1 year, 11 months ago

No tax cuts - instead we need to cut brownback and his cronies !!!! (Koch etal)

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Cant_have_it_both_ways 1 year, 11 months ago

Tom Holland garners his voter base from those who are dependent upon the system and those who don't have any desire to work. Spreading hate and discontent about those who do actually work and produce, and then, in turn, demanding that the producers pay more so the non-producers can have a better life. I call BS on this. If you can't afford whatever it is that you want or need, why not just take it out of the pockets of those who actually worked for it or can.

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question4u 1 year, 11 months ago

The Kansas Legislative Research Department is a non-partisan agency that has existed since the 1930s. This agency has made the calculations. Tom Holland merely repeated the agency's conclusions.

The response to this non-partisan study should be a non-partisan call for caution. Instead, we are reminded once again that partisanship trumps common sense for some Kansans.

I hope that Tom Holland quotes Newton's law of universal gravitation sometime. It would be fun to see a bunch of Kansans afraid that if they step outside they might float away.

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Shelley Bock 1 year, 11 months ago

Brownback's plan is to reduce revenue, then expenditures for the common good will drop because there won't be money. Reductions for education will reduce the quality of the schools and force movement to vouchers. Marginal expenditures will be the incentive for further privatization of State functions.

Reduce income and State government will go away is their plan. Brownbaks's friends will support this propaganda with their money. Let the middle class think that they're in the middle while dropping dropping into poverty. The masses will still vote Republican because Brownback types promise lower income taxes while increasing costs for the middle and lower classes, jobs that never materialize, guns, no gays, and no abortion. That is until the day the majority wakes up and is shocked at what happened.

The pendulum swings hard when it goes to an extreme.

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JayhawksandHerd 1 year, 11 months ago

So, not only should we flush a $612 million surplus down the toilet, but we should put the state nearly $300 million in the hole for good measure. Yup, fiscal conservatism at its finest.

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rockchalk1977 1 year, 11 months ago

When did Democrats start caring about debt? Sen. Holland needs to be reminded he lost the election.

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tbaker 1 year, 11 months ago

Once again we are presented with a statist (Mr. Rothschild) who proceeds on the tired old assumption that tax money belongs to the government, not the people who worked for it and earned it. All he has to do is insert the simple line: "if current spending levels are not reduced" then the surplus he speaks of will be threatened by the tyranny of simple math he describes.

He doesn't insert this line because he also proceeds on a second very common statist presumption that all state spending is utterly essential and we cannot get by without a penny of it. Wasteful government spending is as certain as the sunrise as he well knows. He omits this truism for the obvious reason that the gloom and doom premise of his entire piece collapses were he to caveat his story with any mention of the spending cuts it would take to preserve the budget surplus.

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chootspa 1 year, 11 months ago

Oh, I think he understands very well that it will lead to lower revenue. He's forcing spending cuts because that's his intent all along. He'll use it as an excuse to plunder retirement accounts and cut spending on social programs.

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Cant_have_it_both_ways 1 year, 11 months ago

Lets see, since almost half the people don't pay any income taxes....well... If everyone participated then the non-producers would not cost the producers near as much.

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autie 1 year, 11 months ago

The Governor has defunded art and culture. Now maybe he needs to defund arthimetic as it is not good for Kansas. Any formula that results in such a large negative number must be flawed and defunded.

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gccs14r 1 year, 11 months ago

Heck, I thought it was stupid when Bill Graves cut taxes back in the 90s. I knew then that we'd end up in a hole. Now we're even deeper in the hole and Brownback wants to keep digging. It's madness. If we really do have some money sitting around, how about using that as a reserve fund, or investing it in crumbling Regents infrastructure, or restore K-12 funding, or rail, or something useful? Heck, use it to clean out some of our silting-in reservoirs.

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Grump 1 year, 11 months ago

I'm surprised Brownback doesn't order Kansas Legislative Research Department to write a estimate showing numbers he likes better.

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