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Archive for Monday, August 20, 2012

Democrats seek to tap Kansas populism

August 20, 2012

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— Kansas Democrats are trying to reclaim the state’s Populist tradition, attacking conservative Republican tax-cutting policies in hopes of avoiding a wipeout in legislative races. They’re battling frustration in a GOP-leaning state with Democratic President Barack Obama.

Gov. Sam Brownback and other conservatives have enjoyed the backing of the Kansas Chamber of Commerce and Koch Industries Inc., the multibillion-dollar Wichita-based company. But they’ve also positioned themselves as champions of entrepreneurs in promoting massive income tax cuts enacted this year as a way to boost the state economy.

Democrats contend the tax cuts are reckless, likely to create an ongoing, artificial budget crisis endangering aid to public schools and spending on social services. But they’re also arguing that the tax cuts are unfair to middle-class and poor Kansans, particularly wage earners.

“In a law firm, the partners pay no tax, but the clerical personnel remain fully taxed,” Martin Dickinson, a longtime Kansas University law professor who specializes in tax issues, said during a recent Statehouse news conference organized by the Kansas Democratic Party. “On the farm, the farm owner is tax-free. The hired hands — who are employees, of course — will all continue to pay tax.”

Link to populism

Many Kansas Democrats have seen themselves as heirs of the Populists of the 1880s and 1890s, but some centrists and liberals have had misgivings about such a link, particularly in the 1990s when Gov. Joan Finney pushed the Progressive Era idea of allowing voters to bypass legislators to enact laws and constitutional changes. Govs. Kathleen Sebelius and Mark Parkinson tried to display pro-business leanings to woo moderate Republicans.

Meanwhile, conservatives’ takeover of the state GOP had a Populist undercurrent, even as their anti-tax, small-government ideas appealed to corporate leaders. Abortion opponents and other social conservatives derided Republican moderates as a country club establishment, while others portrayed government as an oppressive behemoth.

Brownback’s administration has repeatedly touched on the last theme. Revenue Secretary Nick Jordan suggested last week that critics wanted to turn back the clock to save big government.

Tax cuts

The Legislature’s staff has estimated that the income tax cuts will be worth $231 million during the current fiscal year, with the figure growing to $934 million annually after six years. Brownback’s administration describes the relief as broad, because all individual income tax rates will drop for next year.

The tax cuts also exempt the owners of 191,000 partnerships, sole proprietorships and other companies from income taxes, and supporters are trying to send a message that Kansas values entrepreneurs.

“It’s pure economics. Three-fourths of Kansans work for somebody who employs 10 or fewer people,” Brownback said in an interview with The Associated Press. “What we’re trying to establish is the best business environment in the country for small business.”

But Dickinson, a registered Democrat who’s taught at Kansas University since 1967, noted that the tax law doesn’t limit owners’ ability to avoid taxes based on the size of their businesses, so wealthy enterprises can benefit, too. Brownback countered that he favored such limits in the first years of the plan but accepted what lawmakers passed to get the state on a new economic path.

The state also is dropping its top rate to 4.9 percent from 6.45 percent while ending a rebate for poor and working-class families for the sales taxes they pay on groceries.

Earlier this year, the Washington-based Institute on Taxation and Economic Policy concluded that the law would result in a small tax increase on average for Kansas residents earning less than $20,000 a year, while people earning more than $400,000 would receive the biggest percentage cut. Brownback called the analysis “wholly unfounded,” but the institute’s numbers generally tracked with Department of Revenue figures on the collective income tax changes for groups of taxpayers.

Still, Kansas Democratic Party Chairwoman Joan Wagnon acknowledged last week that critics’ arguments are more complicated than the simple and beguiling message that big income tax cuts will make the state more prosperous.

However, she and fellow Democrats have compelling reasons to make their pitch.

Comments

Larry Sturm 2 years, 4 months ago

Cutting taxes never trickled down anything but to make the rich richer and the poor poorer,

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