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Archive for Friday, January 25, 2013

Statehouse Live: Democrats battle Brownback over tax plan

January 25, 2013

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— Democratic legislative leaders on Friday criticized Gov. Sam Brownback's tax plan, saying it increased taxes on middle- and low-income Kansans to benefit the wealthy.

Meanwhile, the Brownback administration sought to frame the tax package as benefitting all Kansans by growing the economy.

Kansas Department of Revenue Secretary Nick Jordan defends Gov. Sam Brownback's tax plan.

Kansas Department of Revenue Secretary Nick Jordan defends Gov. Sam Brownback's tax plan.

Senate Minority Leader Anthony Hensley, D-Topeka, and House Minority Leader Paul Davis, D-Lawrence, criticize governor's tax plan.

Senate Minority Leader Anthony Hensley, D-Topeka, and House Minority Leader Paul Davis, D-Lawrence, criticize governor's tax plan.

Referring to a report by the non-partisan Kansas Legislative Research Department on the governor's tax proposal, Senate Minority Leader Anthony Hensley, D-Topeka, said, "These numbers show that in reality it is a tax shift onto the middle class, at the expense of the middle class to benefit really wealthier Kansans and, of course, corporations."

Brownback, a Republican, has proposed reducing the top rate on the personal income tax from 4.9 percent to 3.5 percent and the low rate from 3 percent to 1.9 percent by 2017.

Already facing a revenue shortfall because of tax cuts he signed into law last year, the governor has proposed, as a way to balance the budget, keeping the state sales tax at 6.3 percent, instead of allowing it to fall to 5.7 percent as is required under current law. Brownback also wants to eliminate income tax deductions for the property taxes that Kansans pay on their homes and the interest charged on their mortgages.

The plan would cut personal income taxes by $1.8 billion over five years, according to the legislative research figures.

But keeping in place the higher sales tax rate and eliminating the homeowner deductions would cost Kansans approximately $2.5 billion.

That means the state would see an increase in revenues of approximately $700 million.

"The income tax cuts that he is proposing really disproportionally benefit the wealthiest of Kansans," said House Minority Leader Paul Davis, D-Lawrence.

Davis shared figures from the Kansas Association of Realtors that show 93 percent of Kansans who claim the mortgage interest deduction earn less than $200,000 per year, and 65 percent earn less than $100,000.

Even Republicans, who hold huge majorities in the House and Senate, had voiced concerns this week about Brownback's plan.

On Friday, Kansas Department of Revenue Secretary Nick Jordan sought to counter the criticism. Jordan held a briefing with reporters, saying the goal of Brownback's tax plan is to grow the Kansas economy, increase jobs and increase net income of Kansans.

He said studies show the best way to do this is reduce state personal income taxes. Jordan noted that governors in Oklahoma, Nebraska and Louisiana are following this strategy, and Texas has no state income tax.

Asked if Kansas could still maintain a high-quality public school system while reducing revenue through tax cuts, Jordan said the state could. He said a study by economist Arthur Laffer, whom Brownback hired last year as a consultant on his tax cuts, shows that some states that lower income taxes see an increase in tax revenue through economic growth and more personal spending.

Asked about Brownback's elimination of the food sales tax rebate program and other tax credits meant to help the poor, Jordan said Brownback has a heart for low-income Kansans. "He's not out to hurt them at all," he said.

He said Brownback wants to get "social engineering" out of tax policy and fund accountable programs that help the poor.

Jordan distributed charts that showed how Brownback's tax plan would work. The revenue department put together statistics based on average salaries and average home valuations for several counties, including Johnson County.

A person in Johnson County earning an average salary for that county of $91,500 with an average home valuation of $238,743 would lose $407 through the elimination of homeowner deductions, but would realize a tax savings of $552 through the income tax cuts. The net tax reduction would be $145, Jordan said.

Comments

grandnanny 1 year, 2 months ago

You should also realize that the high sales tax is also a way to help business owners get even more money. Many companies do not send sales tax to the State but keep it for themselves to spend on "improvements" to the business. One more way that corporations get "welfare" from our tax money, but they don't have to be drug-tested like the poor who receive welfare.

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Centerville 1 year, 2 months ago

Doesn't Sam realize that everything in Kansas exists to keep a bloated state government in velvet? State government is so important to Kansans that many of them stay up nights worrying "will any state office have to think twice about spending my money on something stupid? Oh, I hope not!"

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oldexbeat 1 year, 2 months ago

Clearly by getting rid of the property tax deduction, Brownback and his crew are getting ready for huge increases in property taxes neccessary for the various USD school districts to support their schools. So, if the Koch family only owns one house in a old neighborhood without a mortagage, they won't care. No state income tax on the richest private brothers in the country -- that will be the offset for Koch suckers and friends. The reward for working middleclass jane and joe -- huge increases in property taxes. And in sales taxes -- the Kochs already own everything they need. Hey, sounds NOT fair to me.

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roadwarrior 1 year, 2 months ago

very true jafs. I wonder if he thinks we won't notice he's saying one thing but achieving the other. lol.

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bobberboy 1 year, 2 months ago

Brownbacks trickle down theory ! Didn't Reagan try that back in the 80's !? Well, don't look now but not much trickled down ! Brownback a day late and a dollar short. Give all the money to the rich people - they will use it to stimulate the economy !! HAHAHAHAHAHAHAHAHAHAHAHAHAHAAH!!!!!!!!!!!!!! iF THE RICH REALLY WANTED TO STIMULATE THE ECONOMY THEY WOULD SIMPLY RAISE THE MINIMUM WAGE.

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jafs 1 year, 2 months ago

I wish he'd make up his mind whether or not he wants to raise taxes and revenue for the state or cut them and reduce revenue.

The example cited would mean that person is paying lower taxes - if that were true for all of us, then the plan wouldn't raise revenue, it would decrease it.

Can't have it both ways.

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voevoda 1 year, 2 months ago

"Brownback wants to get "social engineering" out of tax policy." Really? His tax policy is all about social engineering: favoring the rich over the poor, favoring the self-employed over those who work for someone else, favoring people who have enough cash not buy a home outright over those who need to finance purchase over a long number of years, favoring private schools over public schools, favoring men over women in reproductive health care.

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SouthWestKs 1 year, 2 months ago

You need to keep track of the rigs that are drilling for gas & oil. Kansas will have a lot of gas & oil very shortly. Keep warm & have a great day.

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Newell_Post 1 year, 2 months ago

Nevada - gambling. And they are having problems due to casinos moving to other states and gambling going online.

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roadwarrior 1 year, 2 months ago

Kansas is one of only 4 states that still charges full sales tax on food with the excuse that state income tax credits offset that burden on the poor. Brownback wants to eliminate the income tax credit and keep the sales tax on food at even the inflated rate that was due to expire. The views around here aren't good enough for that kind of cost of living. Ya, I'm mad at Obama, mad at him for taking Sebilius away from us. How did we go from a woman democratic Governor to Sam ? Did we get a lot of new residents I don't know about ? Please tell me democrats have someone to effectively challenge Brownback. We have to start running to beat this guy today !

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voevoda 1 year, 2 months ago

In an attempt to make it look like the elimination of the mortgage interest deduction will not penalize the middle class, the Kansas Department of Revenue Secretary Nick Jordan offered this example:

"A person in Johnson County earning an average salary for that county of $91,500 with an average home valuation of $238,743 would lose $407 through the elimination of homeowner deductions, but would realize a tax savings of $552 through the income tax cuts. The net tax reduction would be $145, Jordan said."

But let's parse that example. The mortgage interest deduction is not based on the "average home value" (in Johnson County or anywhere else), but rather on the outstanding amount owed on the mortgage (the principle) and the interest rate (which would vary from homeowner to homeowner).

So maybe the Revenue Secretary misspoke, and the $238,743 is the outstanding amount of the mortgage? If Nick Jordan misspeaks in this way is he really qualified to be Revenue Secretary??

But the real question is not what happens to a person who is earning considerably more than the average Kansan and therefore benefits from the sharp cut in the top tax rate. What happens to the more modest Kansan wage-earner, who maybe brings home $45,000 a year and is living in $125,000 condo? I'd like to see that calculation. Someone earning $91,500 doesn't need tax relief nearly as much as someone earning half as much.

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Armstrong 1 year, 2 months ago

Did I read this wrong ? Rothy first states we are looking at a shortfall in revenue then later in the article it is stated we are looking at a $ 700 million increase in revenues. Which is it ?

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Cant_have_it_both_ways 1 year, 2 months ago

News report from Michigan today:

YES WE CAN! Democrats left Gov. Scott Walker (R-WI) with a $3.6 billion deficit, and as of yesterday he has transformed it into a $484 million surplus. Walker has only been in office for two years but it is turning into a golden age for the state. The Walker administration and the GOP legislature has balanced the budget, created a surplus, lowered unemployment, put limits on greedy unions, and enacted conceal and carry. For the first time in 12 years, property taxes have decreased. In the annual survey of job creators, 94% said Wisconsin is headed in the right direction (compared to just 10% who said the same thing in 2010). On June 5, 2012, Walker became the first governor in American history to win a recall election. He won the election with more votes and by a higher percentage than he had won in 2010.

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Katara 1 year, 2 months ago

I just read this on another site that was discussing Brownback's attempt at eliminating the income tax.

"While Mr. Brownback has aspired to make Kansas a state without income tax, critics note that other such states have other streams to supplement their revenue - Texas, for instance, has oil, and Florida has tourism. "

So really it makes sense in a way. Use what a state has vast supplies of to provide a source of revenue.

And if there is one thing Kansas has a surplus of, its flat. So, of course, they should implement a 'flat tax'."

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Katara 1 year, 2 months ago

"Asked if Kansas could still maintain a high-quality public school system while reducing revenue through tax cuts, Jordan said the state could. He said a study by economist Arthur Laffer, whom Brownback hired last year as a consultant on his tax cuts, shows that some states that lower income taxes see an increase in tax revenue through economic growth and more personal spending."

Some states have other sources of revenue such as tourism and oil.

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8thNOTE 1 year, 2 months ago

Brownback is a horrible man and needs to be impeached for what he has done to low income Kansans and children. Next is drug testing TANF recipients and the unemployed,a tactic that has proven to be more costly than beneficial to the state. Kansas is destined to be the next Mississippi - highest poverty stricken state, lowest in education. Get those idiots out of Topeka!

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Larry Sturm 1 year, 2 months ago

You can show anything you want with a chart and hand picked numbers.

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