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Archive for Friday, January 20, 2012

Brownback’s tax proposal on the ropes

House Republican leaders on Friday released their own tax plan. From left to right are Majority Leader Arlen Siegfreid of Olathe, Speaker Mike O'Neal of Hutchinson, Richard Carlson of St. Marys, and Marvin Kleeb of Overland Park.

House Republican leaders on Friday released their own tax plan. From left to right are Majority Leader Arlen Siegfreid of Olathe, Speaker Mike O'Neal of Hutchinson, Richard Carlson of St. Marys, and Marvin Kleeb of Overland Park.

January 20, 2012

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— Gov. Sam Brownback's tax plan was on the ropes Friday after reports and studies showed it would increase taxes for many Kansans while cutting taxes for businesses and the wealthy.

House Democratic Leader Paul Davis of Lawrence said he doubted the plan by Brownback, a Republican, could pass either the House or Senate even though the GOP has huge majorities in both chambers.

"There is opposition all across the political spectrum for a lot of different reasons," Davis said.

House Republican leaders praised Brownback for producing a plan, but on Friday offered one of their own. In a statement, the House GOP leaders said they wanted a comprehensive plan that increased jobs "while not increasing the tax burden on lower-income Kansans."

In a news conference, Brownback defended his proposal, which he unveiled 9 days ago. But Brownback added that he was "open to suggestions." He maintained that tax rates must be cut to spur economic development.

Brownback's proposal would lower state income tax rates and cut taxes for nearly 200,000 businesses.

But many Kansans would see an increase in their overall taxes because his plan would also do away with tax credits and deductions, and it would make permanent the temporary 6.3 percent state sales tax that was scheduled to decrease to 5.7 percent next year.

A study by the non-partisan Institute on Taxation and Economic Policy said that "80 percent of the state's income distribution would collectively see a tax hike under the Brownback plan" because of the loss of credits, deductions and keeping the higher sales tax rate.

Figures provided by the Kansas Department of Revenue showed that as a group, people earning $25,000 or less, who now see a $1.7 million refund, would under Brownback's plan end up paying $86.5 million, while those earning $250,000 and more would see the largest percentage tax cut at 18.5 percent. In 2009, there were 564,368 returns in the under $25,000 earning category, while there were 21,158 earning more than $250,000.

Senate Democratic Leader Anthony Hensley of Topeka has called Brownback's plan "Robin Hood in reverse."

But Brownback argues that lowering tax rates will spur business growth and improve the overall economy, helping people in all income levels. "The best thing we can do is create jobs," he said.

He has come under fire for wanting to eliminate deductions such as the home mortgage, charitable contribution, food sales tax rebate, and especially the Earned Income Tax Credit, which goes to help working low-income families.

Brownback said taking the EITC funds and plowing them into Medicaid would provide a greater benefit for poor people. But he conceded he didn't plan to use the funds to increase the number of people eligible for Medicaid, only to reduce waiting lists for in-home services for those with disabilities.

Meanwhile, House Republican leaders outlined a plan that would keep the tax deductions, except the EITC, and allow the state sales tax to decrease as scheduled. Like Brownback's plan, it would exempt 191,000 partnerships, sole proprietorships and other small firms from having to pay income taxes on their business earnings.

The plan would limit state spending growth to no more than two percent annually. Revenues collected above that amount would be used to reduce state income taxes.

House Speaker Mike O'Neal, R-Hutchinson, said the proposal represented comprehensive tax reform and a responsible budget. "This plan is a prudent approach," he said.

But Democrats assailed it, saying the two percent cap on spending would mean funding needs for social services and schools, which have been cut in recent years, would go unmet.

And they said they didn't understand why Republicans are adamant about eliminating the EITC.

"That is a tax credit that really helps low income, especially single mothers. It rewards work," Hensley said.

Democrats said the Republicans are missing the mark on their tax plans.

"Kansas doesn't have an income tax problem. It has a property tax problem," said Hensley.

According to the Tax Foundation, Kansas was the 41st worst in property taxes while its income tax ranked 21st.

The Democratic plan would use a portion of higher than projected state revenues and allocate $45 million to local governments to reduce property taxes.

Comments

Steve Bunch 2 years, 11 months ago

"It's" is a contraction, not the possessive. Sigh.

ctrowbridge 2 years, 11 months ago

Thanks, AlfVenison. It's fixed now. -Caroline Trowbridge community editor

JackMcKee 2 years, 11 months ago

Now if we can just get something done about Cromwell's stupid ideas.

thebigspoon 2 years, 11 months ago

So, let me understand this. The "new and improved" tax proposal still eliminates the EITC for low income WORKING people, but does not change their tax bracket. It allows most businesses and partnerships to discontinue paying tax on their profits, but does not change the tax brackets for ordinary working people. It keeps deductions for people who can afford real estate. It will "spur business growth" that will result in increrased income (?) for busisnesses, which will lead to wholesale job creation.

How, exactly, outside Laffer's trickle-down model, which has not worked since its inception, and Sam's adamant stomping of less wealthy folks, will this proposal be better? It is inconc eivable to me that any legislator can think this is reasonable, unless it is compared to the draconian plan actually proposed by Brownback himself.

The bottom line is this: Kansas tax policy as foreseen by Brownback and Koch (the real power in our present government) will continue to be prejudicial to the people who work for wages; who have little if any ability to even work; who don't care if big money makes more money and retains more money but wish only for a sustainable standard of living. In what earthly way can this man justify his tax plan making a positive difference to the people of Kansas? The answer is, he can not. Perhaps the legislature will have an attack of conscience.

JackMcKee 2 years, 11 months ago

I don't think the House plan is going anywhere, either. Just wait for the Senate's bipartisan/citizen committee report. I think you'll find that to be much more palatable.

thebigspoon 2 years, 11 months ago

I certainly hope so, Jack. The exciting thing will be to see, if it happens, the Senate making choices that are pro-Kansas rather than pro-Koch. Waiting with bated breath...............

Jonathan Fox 2 years, 11 months ago

As much as I don't like the plan, especially Brownback's plan; I can easily see where the ideas are coming from. Do you really expect the 21,158 top earners to pay for the services of 564,368? Those top earners aren't drawing medicaid or social services, or deducting food sales tax.

The problem remains that this state relies heavily on property taxes. You can notice this especially in Lawrence which is a major rental town. Students and other renters benefit from the massive taxes paid by the property owners (home owners and business owners) that they don't have to pay.

This is a plan, that I see needing different suggestions, does have it's advantages. The plan is trying to create jobs. Lowering taxes on partnerships and sole proprietorships are the number one job creators anywhere.

I don't think getting rid of the EITC is something I would do, but I do agree with keeping up the sales tax. Everyone pays sales tax.

jafs 2 years, 11 months ago

Your contention that renters don't pay those sorts of taxes is incorrect, as far as I can tell.

Landlords pass on the costs of their property taxes in the rents. Businesses pass on those costs in their prices.

jafs 2 years, 11 months ago

I'm sorry, but I don't understand your point.

How does a 2 million apt (whatever that is) house 60 rentals?

And what does your next sentence mean?

"60 of the smallest houses would be 6 million or upwards of 12 million"?

yourworstnightmare 2 years, 11 months ago

The disregard and indeed apparent dislike that Brownback and the GOP have for low income people is breath taking.

Jayhawk1958 2 years, 11 months ago

House Speaker Mike O'Neal, R-Hutchinson, said the proposal represented comprehensive tax reform and a responsible budget. "This plan is a prudent approach," he said.

I don't think anyone cares about what you say Mr. O'Neal. You have zippo credibility.

JackMcKee 2 years, 11 months ago

People move away from Kansas to get away from people like Mike O'Neal.

jafs 2 years, 11 months ago

You do know that Social Security and Medicare benefits generally pay out much more than individuals have paid into the system?

Will you be returning all of that extra cash to the government, given your dislike of people getting more than they've given?

jafs 2 years, 11 months ago

I notice you didn't answer the question.

I take it that means you will in fact be taking much more from those programs than you paid into them.

Do you apply the same judgement towards yourself about that as you do towards others?

ksjayhawk74 2 years, 11 months ago

"Spaghetti Monster forbid people actually had to pay for what they get in Kansas"...

Unless they're rich. Then they can keep all their money right?

Poor people do pay taxes even if they do get the EITC and a tax rebate. They pay Income tax and sales tax. The poor and middle class spend a much higher percentage of their income on taxable purchases than do rich people.

Jonathan Fox 2 years, 11 months ago

It's true that poor people pay income and sales taxes. But that doesn't change the fact that poor people draw more government money than rich people who not only pay HIGHER income tax and sales tax, but also pay really high property tax, capital gains taxes, higher death taxes, and probably own businesses that pay income and sales taxes and more property taxes on that business and half the taxes of their employees medicare/caid/social security and on and on and on.

"The poor and middle class spend a much higher percentage of their income on taxable purchases than do rich people." But they also draw back a vastly larger amount of that back from the government than do rich people.

jafs 2 years, 11 months ago

If you pay "really high" property taxes, it's because you own a very expensive house, in a very fancy neighborhood.

Customers pay sales taxes, not businesses.

Capital gains taxes are a lower percentage than income taxes, so those with a lot of income from them are paying a lower percentage than those without.

The very poor do "draw government money", those in the middle not so much - what's your example of that for middle income earners?

Life in America seems pretty good for the rich, as far as I can tell - I don't have a lot of sympathy for them. On the other hand, it seems pretty bad for those at the bottom, and increasingly difficult for those in the shrinking middle.

I have yet to hear of a rich person who so envied the poor that he/she gave away all their money, so that they could live off of the government.

It must not be that attractive an option.

Jayhawk1958 2 years, 11 months ago

Sounds like you ain't missing any meals.

beatrice 2 years, 11 months ago

I'm not sure why they need to make more changes -- they cut the arts already. Didn't that fix things?

Kendall Simmons 2 years, 11 months ago

I don't know of any business owner, myself included, who has ever created a job because of a tax cut we received.

kochmoney 2 years, 11 months ago

That's because jobs are created when demand increases. You increase demand by making sure the middle and lower classes have money to spend. You know, the exact opposite of Brownie's plan.

RogueThrill 2 years, 11 months ago

But... but the poor need to have "skin in the game."

Well, financially speaking, the poor don't have any freaking skin.

kochmoney 2 years, 11 months ago

I always love that whole "skin in the game" argument. As if people enjoy being poor because they prefer it to high risk activities like having money.

verity 2 years, 11 months ago

Perhaps Brownback started with a plan he knew would be unacceptable so by "compromising" he could still get a very draconian plan. But that might be giving him more credit than is due.

JackMcKee 2 years, 11 months ago

By the time this is all over everyone will be wishing it had never been brought up. Thus is the nature of "tax reform". You'd be better off just leaving it alone.

ksjayhawk74 2 years, 11 months ago

I have a modest proposal. Since all you whiny Liberals don't want poor people to have to pay more taxes and Brownback doesn't want poor people to get their EITC... Let's just sell poor people's children and contribute the profits is the State treasury.

That way, we don't need to give poor people extra money for their kids because they won't have kids anymore and Kansas still gets money out of them. That's what I call having skin in the game.

ksjayhawk74 2 years, 11 months ago

+100. You get jokes and don't jump to foolish conclusions and accusations.

ksjayhawk74 2 years, 11 months ago

Take it easy, Jesse. It's was a sarcastic joke about the careless attitude of the Brownback administration toward poor people.

kochmoney 2 years, 11 months ago

Just like we used to do with other minorities. It worked out so well last time.

hedshrinker 2 years, 11 months ago

Re False Hope's assertion of taxation without representation and desire to keep all earned $$$....are you going to turn away the firefighter or police officer when you need them, or not use the highways or any of the innumerable Fed and State svcs in place for you and all citizens every day? You have a voice just like the rest of us in the voting booth, and I hope you are as free with yr opinions to our elected officials as you are on this board so they will be able to benefit from yr wisdom.

Richard Heckler 2 years, 11 months ago

There is no evidence that candidates from the business community make the best politicians. They are much too eager to give our tax dollars away to the corporate community without solid foundation as to why. Speculation is not a solid foundation.

There is no solid evidence that tax cuts produce tons of jobs. If tax cuts/tax incentives produced tons of jobs the USA and Kansas would be standing in the sea of job surplus. http://www.dollarsandsense.org/archives/2001/0301miller.html

If business people make the best candidates why did the USA and Lawrence become a “boom town economy? Boom town economies always crash this is not new economics. There are way too many “free lunch programs” . http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

More republican thinkers anywhere in government is a recipe for economic disaster. Remember Reagan/Bush and Bush/Cheney home loan frauds plus Sam Brownback was nearby.

Millions of jobs were lost during the FIRST Savings and Loan/home loan scandal and during the global economy push = outsourcing under Reagan-Bush. Yes republicans gave outsourcing a wide open door as they began waving good bye to the best paying USA jobs.

Then Bush/Quale came along.

Then free trade and Clinton’s NAFTA came along.

Bush/Cheney lost 2 million in their first admin and 9 million during the second admin when the SECOND home/loan scandal surfaced.

The USA is down about 20 million jobs. No new industry has been been developed to bring those jobs and their pay scales back = loss of national wealth. No country,state or city can afford companies that send jobs abroad. It’s called Wreckanomics.

James Minor 2 years, 11 months ago

Ahhh! the theory of supply side economics. Reagan and Bush 1&2 tried it and they proved that it won't work in today's society. Even with reductions to taxes for businesses there still will be additional tax abatements and incentives that cities will have to use to attract businesses to their location, reducing the tax breaks to businesses even lower.The idea to lower taxes to businesses with the hope of improving business growth in Kansas is a good theory -- but only a theory.

If Kansas wants to make the theory work, there must be stipulations and regulations. A business that decides to move to Lawrence must be held accountable if tax abatements are determined on an expected number of employees being hired, and the business does not hire the number of expected full time people with benefits from the Lawrence/Douglas county area.

Reducing the amount of tax breaks for low income working people assumes that they want to be in that position. Brownbacks idea is consistent with the GOP candidates running for president. Someone would have to be on drugs to seriously think that any of the four or five remaining candidates have a clue on how to improve America job growth.

God save us all and Please vote for Obama!!!!

Fred Whitehead Jr. 2 years, 11 months ago

Best news I have heard today. Gov Glory Hal-lay-loo-yah slops his dripper again!!

When is the next election? Will the clueless voters who elected this druid learn the error of their ways?? I doubt it.

Kontum1972 2 years, 11 months ago

wanting to eliminate deductions such as the home mortgage, charitable contribution, food sales tax rebate, and especially the Earned Income Tax Credit, which goes to help working low-income families.

gee what a brilliant idea....! where the hell did he receive his economics degree?

and the majority of us baby-boomers....are retiring... how about the governor giving up his salary and do it out of his love for the State....? if he really wants to be a local hero...

Kontum1972 2 years, 11 months ago

u forgot all the war veterans coming home and they are being let go by the military....due the downsizing..and all the civil-servants......

1983Hawk 2 years, 11 months ago

After working on this plan with six months of hype and fanfare, it is apparent that the genius who devised it has fouled his pants spectacularly, as leaders of both political parties have declared it dead before it was even introduced in committee.

deec 2 years, 11 months ago

Ah, but it was a good excuse to give away a bunch of money to his cronies like Laffer.

lilygrace 2 years, 11 months ago

The picture says it all - a bunch of senile, flabby-assed, old, male Republican crackers, doing what they do best - sitting around making life miserable for everyone who isn't them. Talk about taxation without representation!

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