Archive for Saturday, January 28, 2012

Think tank says governor’s tax plan would benefit large businesses, wealthy investors

January 28, 2012


— A tax research center says a major part of Gov. Sam Brownback’s tax overhaul would create a new giveaway to large businesses at the expense of state services and other taxpayers.

“This one is really unprecedented,” said Michael Mazerov, a senior fellow with the Washington, D.C.-based Center on Budget and Policy Priorities.

Under the plan by Brownback, a Republican, tens of thousands of businesses would not pay taxes on certain business income.

Brownback has said his “fairer, flatter and simpler” plan will spur business growth and encourage financial investment in Kansas while providing enough to fund core government functions.

It eliminates income tax on nonwage business income and could affect 191,000 filers. The Brownback administration has called this a “unique and highly targeted strategy to make Kansas an incubator for innovation and a national center for entrepreneurship.”

But the nonpartisan Center on Budget and Policy Priorities says Brownback’s proposal would provide a tax break on what is called “pass-through” profits, which would benefit many large corporations and wealthy owners of large investment funds that have no employees.

These large corporations are organized as partnerships, Subchapter S corporations and limited liability companies, the center said.

Under the proposal, the state would lose a lot of tax revenue, the center said. IRS data show the profits from pass-through entities and sole proprietorships represent about 8 percent of the Kansas personal income tax base, or $266 million. A $266 million loss of tax revenue is greater than the combined state appropriations for Kansas University and the KU Medical Center.

“The major beneficiaries of such a giveaway are unlikely to be the small businesses and job creators that Gov. Brownback says he is intent on helping. Instead, the benefits would flow in great measure to large, established businesses, some of which don’t even have employees,” the center said. House Republican leaders have also signed on to this portion of Brownback’s plan and another one: elimination of the state portion of the Earned Income Tax Credit, which is a refundable tax credit for low-income working families.

Mazerov said this is another mystifying aspect of the tax debate in Kansas.

“(The EITC) is one tax policy for which there is a very bipartisan approach in most states,” he said. The tax center is called liberal by some conservatives, but Maserov says he disagrees with that. He said the center favors fiscally responsible tax policy.

Brownback has said that the EITC is fraught with fraud and that revenue saved from the credit can be used to lure more federal dollars and pay for programs for the poor.

But advocates for the poor and children have defended the EITC.

“More than 90 percent of Kansas’ EITC dollars go to families with children, and maintaining this tax credit is critical to ensuring that more children do not fall below the poverty line,” said Shannon Cotsoradis, president and chief executive officer of Kansas Action for Children.

She said studies estimate 4,000 Kansas children would fall into poverty without the EITC.


question4u 6 years, 3 months ago

Flim-Flam Sam may be a dim bulb, but he's always scheming. By now even his thickly insulated brain has absorbed the fact that he will never be elected President of the United States. Is his tax plan a desperate bid to get on the GOP ticket as VP? His hypocritical piety hasn't been too useful since Rick's brain malfunction over that third thing (and, besides, Newt's success demonstrated that personal ethics have nothing to do with getting the support of Tea Party voters). Now Sam seems to be creating the perfect haven for Mitt, who'd be able to come to Kansas after retiring from the presidency, rake in his millions in investments without employing anyone, and not pay a dime in state taxes. On the other hand, if Newt can whip up enough bile among the brain dead to win the nomination, Sam can promise him that Kansas will be the first to enact his cut-the-poor-adrift agenda. (Newt's already liking Kansas a lot because the clear night skies would give him an excellent view of the future state of Moonlanda.)

Of course, Sam's tax plan is far more likely to just be motivated by a desire to cut his own taxes and increase his personal wealth. Still, with Flim-Flam Sam, can you ever really rule out the spectacularly harebrained?

hagar111 6 years, 3 months ago

Right on the money. Speaking of money the republicans and Sam need your help , so all of you available please show up in Topeka and help them load your money into their trucks. Just like you have been doing for years. Wake up people they do not have your interests at heart put down the koolaid

mloburgio 6 years, 3 months ago

The poverty rate for Kansas children rose from 18 percent to nearly 24 percent between 2009 and 2010, and 20,000 more Kansans fell into poverty during the same time frame.

“It’s at least honest,” said Jesyca Rodenberg, spokeswoman for KACAP, about the 2012 Kansas Poverty Report. “We have problems with our infrastructure.”

mloburgio 6 years, 3 months ago

Brownback proposes income tax cut Proposal would lower top tax rate for the rich from 6.45 to 4.9 percent.

Brownback would pay for the tax cuts, in part, by eliminating 23 deductions from the state tax code. According to information provided by his office before the speech, those deductions include the Adoption Credit, the Child Day Care Assistance Credit and the Earned Income Credit. He would also eliminate itemized deductions, which include the home mortgage deduction.

can't wait for my property taxes to sky rocket.


mloburgio 6 years, 3 months ago

Under figures provided by the Kansas Department of Revenue, the group of Kansans with adjusted gross incomes of $25,000 or less currently receive a total tax refund of $1.7 million. Under Brownback’s plan, they would have to pay $86.5 million in taxes, which has been calculated as a 5,102 percent increase. All other income groups would see a tax cut with the largest percentage cut being 18.5 percent for people making $250,000 or more per year.

saraj 6 years, 3 months ago

Thanks for your comment. Too bad the people who elected Brownback did not research what he was about before casting their vote.

Mary Sucha 6 years, 3 months ago

So currently this group with income under $25,000 is paying a negative income tax of ($1.7) million. Eliminating their credits and reducing their tax rate from 3.5% to 3.0%, a 14.3% cut in rate, produces a liability of $86.5 million. That tells me that these taxpayers are currently receiving in excess of $100 million in payments from the rest of us greedy taxpayers.

voevoda 6 years, 3 months ago

It's strange how some folks, such as FalseHopeNoChange, object to taxation in general only when it's the rich who are going to pay. Then it is "their money" and they react as though taxation will reduce them to penury. But the same people whine that poor people, who pay taxes with money they desperately need to pay for necessities, aren't paying their "fair share." They have earned their money as much, or even more, than the super-rich. Why not defend them first, FalseHopeNoChange?

Richard Heckler 6 years, 3 months ago

Gov Sam Brownback and his staff of beltway thinkers are a perfect example of why Kansas and the USA cannot afford RINO's who pose as the republican party. This man is blowing tax dollars like there is no tomorrow.

This is not fiscally conservative thinking. This is fiscally reckless beyond belief.

james bush 6 years, 3 months ago

To a person paying $0 in taxes on his income, a tax of $1 is an infinitely large percent increase. Everyone one should pay something if he has an income. Just making a point. I do not know how good or how bad the Guv's policy is, but I'm pretty sure he's not out to screw the poor.

jafs 6 years, 3 months ago

Why on earth are you pretty sure of that?

Most of his policies seem to affect them negatively.

Julia Rose-Weston 6 years, 3 months ago

I think I understand why you make the last. But it seems to me the "Guv's" intention is to help out this wealthy buddies who helped him and other ultra-conservation get elected into office. He is also intentionally exploiting and robbing from those with few resources, with little power and no hope of changing things to better their lives. In my opinion, he does not conduct himself as the Christian he claims to be. Maybe he's not out to screw the poor, but he will stomp all over them as a means to reach another goal: Get more money.

jhawkinsf 6 years, 3 months ago

Pretty interesting headline; "Think Tank says ... " As we all know, there are various think tanks that come at issues from different perspectives. A liberal think tank might conclude one thing while a conservative think tank concludes something very different and a libertarian one will come to a third conclusion. I'm not sure this article is saying anything more than giving it's opinion.

Cant_have_it_both_ways 6 years, 3 months ago

You are exactly right. Children keep asking someone else till they get the desired answer. You can commission a study for any desired outcome, then boast it as fact. You lie to someone long enough they start to believe it.

Jan Rolls 6 years, 3 months ago

Sam is a dirty stinking lying you name it. He doesn't care one bit about the average person. You people that voted for him ought to be ashamed. He lied and you fell for it.

jhawkinsf 6 years, 3 months ago

Hmmm. A politician, trained as a lawyer, lied to us. Where have I heard that before?

Cait McKnelly 6 years, 3 months ago

Saw the headline and thought, "Well, duh!"

Jimo 6 years, 3 months ago

So, in sum, Brownback's policy is to tax poor people until they self-deport.

kernal 6 years, 3 months ago

Those Repubs and their delusional dream of declaring themselves monarchists with Dems as their serfs. They're such a hoot!

Cait McKnelly 6 years, 3 months ago

OK I sprayed coffee all over my desk. You owe me a new monitor.

Orwell 6 years, 3 months ago

"Brownback has said that the EITC is fraught with fraud…"

Sure, just like the minuscule record of actual voter fraud justifies Kobach's drive to restrict ballot access in a democracy.

"Fraud" is one of those words that tests well as an attention-getter, so you can count on liars to continue using it without regard for the truth. That's the foundation of the Gingrich strategy that's left an elected government powerless to act, even when action is needed.

Katara 6 years, 3 months ago

Honestly, what do you expect from an administration that make statements such as below?

"But the Brownback administration has said there is widespread fraud in the EITC.

Brownback’s Budget Director Steve Anderson said, “We have no way of making sure, for example, that a single mother is spending that on needs for her children.”

beatrice 6 years, 3 months ago

It took a think tank to come up with this? A think wading pool could see the tax plan for what it is -- supply side, "trickle down" economics. Of course it would benefit the wealthy and the poor would need to pay more!

vuduchyld 6 years, 3 months ago

Welcome to Brownbackistan, it's where Kansas used to be Welcome to Brownbackistan, it's our new theocracy Brownback and Koch call all the shots, we're governed by the rich The wealthy all get wealthier and the rest can all eat @$%^

the video:

headdoctor 6 years, 3 months ago

I wish Brownback could explain how his plan would actually spur Business. If the larger population of buyers are middle class or lower, how are they suppose to buy more product and services with less money from higher taxes and property tax that would result as part of his plan.

Katara 6 years, 3 months ago

You ever hear of a wish sandwich? Brownback's plan is kinda like that.

Richard Heckler 6 years, 3 months ago

TABOR & ALEC = This type of activity does not come free of charge no way jose'!

For every tax deduction there is a tax increase ,user fee increase or in general some type of revenue increase somewhere in the pie of taxes. May see local rates increase to make up for loss of state or federal revenues.

This is not coincidence but part of a well orchestrated plan to privatize the state on behalf of corporate campaign contributors. The tax dollar haters have their eyes on our trillions of tax dollars flowing into their bank accounts. Going to the Cayman Islands.

TABOR and ALEC have teamed up against the lower wage earners say from $ 75,000 on down.

TABOR is Coming sells out state governments, public schools,SRS services etc etc to private industry = Grab Your Wallets!

Hundreds of state legislators from all 50 states have gathered in New Orleans for the annual meeting of the American Legislative Exchange Council, known as ALEC. Critics say the Washington-based organization plays a key role in helping corporations secretly draft model pro-business legislation that has been used by state lawmakers across the country.

Unlike many other organizations, ALEC’s membership includes both state lawmakers and corporate executives who gather behind closed doors to discuss and vote on model legislation.

In recent months, ALEC has come under increasing scrutiny for its role in drafting bills to: attack workers’ rights roll back environmental regulations privatize education deregulate major industries * passing voter ID laws.

Nonetheless, this year’s annual ALEC meeting boasts the largest attendance in five years, with nearly 2,000 guests in attendance. A look at some 800 model bills approved by companies and lawmakers at recent ALEC meetings.


Flap Doodle 6 years, 3 months ago

I'd swear that I just saw this same twaddle posted on another thread of this award-winning website this morning.

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