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Archive for Monday, May 14, 2012

Statehouse Live: Tax cuts at center of dispute in Legislature

May 14, 2012, 5:11 p.m. Updated May 14, 2012, 5:19 p.m.

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— Unhappy with projections of budget shortfalls caused by the proposed tax cut, Gov. Sam Brownback’s administration is preparing rosier numbers.

During a meeting of the House Republican caucus, Majority Leader Arlen Siegfreid, R-Olathe, said Brownback’s Budget Director Steve Anderson would soon release a “dynamic scoring model” that Siegfreid said will show the positive effect of tax cuts cycling back through the economy.

The financial projections produced by the non-partisan Kansas Legislative Research Department show the tax cuts will start producing a revenue shortfall in July 2014, increasing to an estimated $2.5 billion to $3 billion shortfall in 2018. The current annual state budget is about $6.2 billion in tax funds.

Moderate Republicans and Democrats have said a tax cut of that size will mean Brownback and the Legislature will have to make drastic cuts to schools, social services and public safety.

The tax-cutting plan headed to Brownback’s desk would cut individual income tax rates and exempts 191,000 partnerships, sole proprietorships and other businesses from income taxes.

An alternative plan approved by a House-Senate conference committee was less aggressive, phasing in some of the tax cuts over a longer period of time.

Brownback has said he prefers the conference committee plan but will sign into law the larger one if the Legislature doesn’t approve an alternative.

On Monday, the Legislature, having already broken the 90-day mark in the session on Friday, lurched in fits and starts with no noticeable progress on tax cuts, the budget or redistricting.

Sen. Les Donovan, R-Wichita, and a leader on the House-Senate tax conference committee announced that the committee would start negotiating again after last week’s legislative blow up over the issue. Then he said the meeting was canceled. Then he said there would be a meeting Tuesday.

“I want to get something out of committee, on the floor (of the Senate), so we can vote,” Donovan said.

While conservatives have embraced larger tax cuts, moderate Republicans and Democrats are pushing for a smaller plan. They are urging Brownback to veto the larger cut.

The Kansas NAACP called on Brownback to veto the measure, saying the legislation would “bankrupt our state.”

The group added, “While the people who feel the adverse cuts of these programs will see their tax burden increase, the wealthiest among us may actually see their fiscal contribution to society lessen. This hardly resembles economic justice.”

Comments

Eride 2 years, 7 months ago

The numbers aren't good enough?

Just make new ones!

Fossick 2 years, 7 months ago

Of course it's fraud. But it's the same kind of fraud that supporters of the arts (to pick one example near and dear to the hearts of Brownback's opponents) use when they cycle arts money through the economy. One dollar spent on arts, we hear, results in $x of economic activity*. Tax cut fraud mongers do the same - for every dollar in your pocket, you'll spend it to employ the butcher, the baker, and the candle-stick maker, all of whom pay sales, property, and income taxes. When you're dealing with imaginary numbers, the sky's the limit.

  • Often x=7, but on really good days, it's even higher.

sourpuss 2 years, 7 months ago

You are suggesting that giving a local group $2000 to put on a local festival or $4000 to put on a play is the same thing as giving someone who has several million dollars a break on his taxes on the off-chance that he just might take that money and (instead of buying some stocks in a company that does not even directly operate in Kansas, getting a new speedboat, sending his kid to Harvard, and booking a flight to Paris for dinner because he likes a restaurant there) do market research to find a new product or service niche, apply for any necessary patents, start a (new) company, invest in local real estate, forgo bringing in his friends from the coasts and instead hire local people to fill the good positions... to a large enough degree to off-set the size of the tax cut? You are suggesting this?

Pardon me while I write up this contract for a lovely bridge in the Bay area.

Fossick 2 years, 7 months ago

You might wish to improve your literacy before you start writing contracts. I'm not suggesting anything, and especially not the talking points you spelled out. I'm telling you the "dynamic" math is the same in both cases. Government Art promoters lie when they say government-sponsored art helps the economy, tax-cut mongers lie when they use exactly the same models to 'prove' that tax cuts result in more revenue and the like. The beauty is that it's exactly the same lie and built on exactly the same faulty premise, that money used their way would not be used otherwise.

sourpuss 2 years, 7 months ago

My literacy is not in question. I contend that you are wrong. Arts funding does help the economy. That money goes right back into the economy at the local and individual level. Giving tax breaks to corporations and their absent leadership injects it into the regional or global economy and it cannot be shown that it has the same, immediate effect. Hoping that it does is just that. Arguing that all options are the same is invalid. You cannot say that giving person x money to do something is THE SAME as giving person y money in hopes that they will give it to person x. It simply isn't. And to argue that money given to x so that they can immediately buy costumes, speakers, decorations, or set paint has no effect on the economy is just non-sensical.

Fossick 2 years, 7 months ago

"And to argue that money given to x so that they can immediately buy costumes, speakers, decorations, or set paint has no effect on the economy is just non-sensical"

Nope, you merely have a blind spot exactly where I said it would be. Money "going back into the economy" does have an effect: let's call that effect X. But all money going into the economy was first taken out of it, and that effect is -X. X + -X = 0. You take money out merely to spend it back in and the result is nil.

Your faulty premise that -X does not exist, that the money spent on paint by an artist would not be spent on paint by the homeowner from whom it was taken originally.

Fossick 2 years, 7 months ago

"My literacy is not in question."

And yet here we are. I argued nothing to the effect that tax breaks are good. I haven't even argued that art is bad. I said twice in my original post that Sam's math is fraud. Still you are attacking straw men with "absent leadership" (what has that to do with math?), flights to Paris, and hope. So either you can't read what I said or you are unprepared to argue outside the carefully crafted bullet points you saw on Huffington Post. Your choice.

Cant_have_it_both_ways 2 years, 7 months ago

When you have more money in your pocket, working class people tend to pay down debt, purchase or replace things they could not have otherwise afforded, etc. This money thing is taxed again and much of what happens is a wash.

How in the world can the economy rebound when the government decides how to spend your money. But of course, if you did not earn it in the first place, then you would be all for the extra taxes on the producers as moochers will always be moochers.

gccs14r 2 years, 7 months ago

And that would be OK, if it were the poor and working classes who were getting the tax break. It's not. Give the wealthy a tax break and they push the money offshore where it sits until enough accumulates to buy an island somewhere. Or they buy elections and rewrite the tax code to get even more money to push offshore. Very little makes it back into the U.S. economy.

I still think we need a tax increase to restore education and healthcare funding. Invest in the citizenry or they'll move somewhere that does.

Orwell 2 years, 7 months ago

Right – like the solution to a hangnail is to cut off your arm.

Jayhawk1958 2 years, 7 months ago

Okay, then you are fine with poor and working class pay no income taxes, but you would still have to pay them?

gccs14r 2 years, 7 months ago

So then the upward transfer of wealth accelerates exponentially as the State crumbles to dust and the people are reduced to serfdom. Do you have a secret aspiration to be a warlord in a post-apocalyptic world? Because that's where we'll end up if we stay on the path of, "Me first. Screw civilization." See Somalia.

headdoctor 2 years, 7 months ago

I wonder if the churches will still be that thrilled with Brownback's plan when the donations and tithing grind to a screeching halt after he breaks a large portion of the State's population. Many if the far right christian zealot churches basic expenses are usually supported by hand full of wealthy families and pious widow members. The rest comes from the flock. It wont make those churches go away but it will sure cramp their style in various areas of questionable spending.

JackMcKee 2 years, 7 months ago

"Brownback’s Budget Director Steve Anderson would soon release a “dynamic scoring model” that Siegfreid said will show the positive effect of tax cuts cycling back through the economy."

This can't really be our State government. This has to be satire.

dabbindan 2 years, 7 months ago

if you're so confident sam, delay your cuts, generate and SAVE the surplus. then make the cuts, pay any deficits with the saved surplus. if you're right, save that surplus for a rainy day.

if you're wrong, pay for deficit with that saved surplus and go back to the old tax rates. (with your tail between your legs) no harm done to kansas citizens.

Keith 2 years, 7 months ago

With this can we rename our state government Sam the Sham and the Pharaohs?

headdoctor 2 years, 7 months ago

That would be a pretty good insult to the 60's band.

Richard Heckler 2 years, 7 months ago

"During a meeting of the House Republican caucus, Majority Leader Arlen Siegfreid, R-Olathe, said Brownback’s Budget Director Steve Anderson would soon release a “dynamic scoring model” that Siegfreid said will show the positive effect of tax cuts cycling back through the economy."

This is not hard evidence? Hard evidence is not available. This is political rhetoric. Can we say BS?

Bob Reinsch 2 years, 7 months ago

StanleyNickels and Shrootbucks are instrumental in this scoring model, and they're right there in the legend, next to leprechauns and unicorns.

chootspa 2 years, 7 months ago

Oooh, a "dynamic model" that factors in the unicorn powder and fairy dust that will magically make revenue appear out of tax cuts. At least I'm assuming they're mixing in the fairy dust this time. Because they've tried trickle down approaches before, and they don't actually work.

texburgh 2 years, 7 months ago

Sorry, Brownie banned fairy dust. It reminds him of the east coast liberal elite socialist homosexual agenda he is committed to keeping out of Kansas.

Shelley Bock 2 years, 7 months ago

This all plays into Brownback's plans. Reduce overall amount of revenue,then it will be impossible to fund state services and education as in years past. Since no lawmaker will vote to increase taxes, the State will be stuck at the lower amount. There won't be the debate about reductions, there will be a debate about which crumbs the programs receive.

“I believe that there should be a very much heavier progressive tax on very large incomes, a tax which should increase in a very marked fashion for the gigantic incomes.” ~Theodore Roosevelt (he must have been a socialist)

chootspa 2 years, 7 months ago

Yes. Yet somehow he'll still find money to pay his buddies from Florida to come work for him.

Fossick 2 years, 7 months ago

(he must have been a socialist)

"Prominently with President Theodore Roosevelt and through the 20th century's first years, the Progressive Movement came into view with its belief in 'the perfectability of man, and in an open society where mankind was neither chained to the past nor condemned to a deterministic future; one which people were capable of changing their condition for better or worse.' The Socialist Party was included within the Progressive Movement..." (from a source) http://www.u-s-history.com/pages/h1669.html

While not a socialist proper*, Teddy was something of a fellow traveler.

  • depending upon one's definition.

JackMcKee 2 years, 7 months ago

Anyone else ever wonder if the kind of person that would move to Kansas to avoid income taxes is the kind of person you'd want to live next to?

Orwell 2 years, 7 months ago

If he'd been taxed at a reasonable rate over there last dozen years I wouldn't much care if he left with all the rest. Now he's taking an opportunity made available to the rich and preserved by their hirelings in Congress. What's new?

Patricia Davis 2 years, 7 months ago

Personally, I wonder about anyone's sanity who thinks Kansas is a great place to live in. My husband has a wonderful job here, but if we could afford to move when he retires we would.This god fearing Brownshirt world is getting pretty crazy. Want to judge Brownback's budget? Keep looking at your property tax soar dynamically while the quality of government services from roads to caring for the poor or educating our children falls off the cliff. I truly suspect at the heart of Brownback's policies is a form of eugenics: let the unhealthy/unfit die or move out of state so we can have an economy that is robust for god's chosen ones.

Part of me, the very at the center cynical wishes this trash heap of misguided economic voodoo comes to pass in Kansas so that once and for all we can say: This is total made-up wishful thinking crap!

AverageCitizen 2 years, 7 months ago

Oxymoron - I understand your sentiments but, unfortunately, the uneducated won't think this is total made-up crap. The conservative spin that has been sold to the working class plays upon their fears. They will keep on spinning it in new ways if the old ones quit working. Unfortunately, "What's The Matter With Kansas" has been out for eight years. If they wanted to know the truth, they would have by now. I don't want the state I love to crash and burn. Letting that happen just means others will try to spread this abomination to other states. I'd like us to be like Wisconsin and FIGHT!

JackMcKee 2 years, 7 months ago

I'm with you. I hope that when the people in western Kansas see the outcome of Sam's tax plan they start voting in a sensical manner. Those small communities are going to get crushed.

Fossick 2 years, 7 months ago

I actually do think Kansas is a great place to live, which is why I live here. I'm sorry that the rest of the state is such a disappointment to you.

JackMcKee 2 years, 7 months ago

I'm in the same boat. When I can afford to retire I'm getting the heck out of here and the coming crushing property and sales taxes. There are far more hospitable places to live. Kansas diving off the deep end has pretty much ruined what few good things there were about the state. It's sad.

Don Whiteley 2 years, 7 months ago

I partially agree and partially disagree. Kansas has been a tremendous place to live and grow up and, trust me, I know. I've lived in New York, Arizona, California, Virginia, Nebraska, and in Canada. The state had been a GREAT place to raise kids with low crime, good fiscal management, and quality public education where our high school graduates across the state were always rated between 1st and 5th in the nation. Now, under control of the ultra-right, the state has taken a gigantic nose dive. I have enough trust in Kansans that I firmly believe that we will pull back from this chasm and get solid, moderate leadership back in the State.

JackMcKee 2 years, 7 months ago

I hope you are right. My family has lived here for 6 generations.

JackMcKee 2 years, 7 months ago

yep, it's so thinly veiled too. Makes you wonder why people don't just laugh in their faces.

Don Whiteley 2 years, 7 months ago

What Siegfreid's statement really means is that they need just a little more time to create the lies and distortions around trickle-down economics to shove this plan for disaster down the throats of Kansans. H., I'm not even a Democrat and I can see the writing on that wall.

Yep, lower taxes means more disposable income, and more disposable income available to Kansans means that they are likely to spend more, that means more money coming into businesses. In turn, to meet that rising demand, American companies will create lots of new jobs... in Mexico, China, India, Malaysia, and 3rd world countries, and the executives of those companies will pocket the rest in big bonuses to themselves. Help to the economic climate in Kansas: zero. Help to 93% of Americans: zero.

tbaker 2 years, 7 months ago

Government budget deficits occur as a result of a conscious decision to SPEND more than revenue received. The tax cuts will cause an initial reduction in revenues; but they are not the cause of some future budget deficit. Deficit spending is the cause. It’s intellectually dishonest to omit this simple fact from all the reporting on the governor’s proposed tax cuts, but there is a good reason the liberal media does this. The idea the people who worked for and earned the money in the first place should not have as much taken from them is an alien concept to many on the left. The prospect of the vast majority of the population being prosperous, self-sufficient citizens, able to successfully navigate everyday life without significant government involvement really scares them.

tolawdjk 2 years, 7 months ago

Everyone knows this, everyone can see this.

However, even the Republicans in power are silent on the magnitude and location of where these cuts will come from. Right now, the only discussion is based on tax cuts.

You can't discuss reductions if none are put forth for discussion.

Michael LoBurgio 2 years, 7 months ago

Tax-cut bill puts education at risk

The following commentary was submitted by school superintendents John Allison, Wichita; John Burke, Haysville; Randal Chickadonz, Rose Hill; Mark A. Evans, Andover; Sue Givens, El Dorado; Justin Henry, Goddard; Jim Keller, Circle; Doug Powers, Maize; Brad Rahe, Mulvane; Mike Roth, Clearwater; Scott Springston, Valley Center; and Craig Wilford, Derby:

The Kansas Legislature’s approval of a tax-reduction bill that will plunge the state general fund into the red beginning in 2014 could critically damage public education in Kansas. If Gov. Sam Brownback signs H.B. 2117 into law, local school districts will need to start planning immediately for huge reductions in state aid.

This isn’t just a challenge for local school boards and school faculty. This is a challenge for our entire community.

Public education is the foundation of our local economy. It generates the quality workforce that is essential to our prosperity. Like any other structure, the foundation must be sustained to keep everything else in place. If the foundation is eroded, everything else starts to crumble.

Our options are very limited. If we want to maintain our current level of academic performance, we would have to replace the state dollars with local property taxes. That is an unacceptable alternative that would only mask the state’s failure to meet its constitutional responsibility to public education.

http://www.kansas.com/2012/05/13/2331...

tbaker 2 years, 7 months ago

Compare student academic performance, dropout rate, and graduation rate to per-student spending on public education and you will quickly see that spending on public education has done nothing but steadily increase over the last 40 years, yet all of the aforementioned metrics have steadily declined.

The last thing we want to do is “maintain” our current dismal level of public school performance. It is in dire need of significant improvement. Money can’t be the reason because we’re spending more than we ever had. Pouring more tax money into the current system is “failing to meet the state’s constitutional responsibility.”

Read the clause in the Kansas constitution. It’s high time the state proceeded to adopt “…related activities which may be organized and changed in such manner as may be provided by law.” It’s time for vouchers so parents can vote with their money and move their children into alternatives. It’s time for public schools to compete for the tax money they take for granted. It’s about improving student performance. It’s about providing the very best for the students so we do in fact meet our “constitutional responsibility” because what we have been doing isn’t cutting it.

I’m all for maintaining funding for education – provided - comprehensive, metric-based, and parent-choice competitive reforms are implemented. The current lack of this what is threatening the foundation of our local economy, and steadily failing to provide the quality workforce that is essential to our prosperity, not the governor’s tax cuts.

Robert Holmes 2 years, 7 months ago

Anyone intelligent knows that budget Director Steve Anderson is going to be able and skew the numbers to make it seem appealing to to some. What we see now is reality, what Steve will try to do is plant a seemingly solid, but flawed theory in front of the public.

Richard Heckler 2 years, 7 months ago

FYI

Worker's taxes siphoned off by their bosses Thursday, April 26, 2012 | 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 http://www.GoodJobsFirst.org.

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