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Archive for Sunday, March 24, 2013

Democrats say tax cuts are tax shifts

March 24, 2013

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  • — Gov. Sam Brownback and his conservative Republican colleagues in the Legislature are pushing through tax changes that they call tax cuts.

    But Democrats say that is not accurate.

    While the Republican proposals would reduce state income taxes, or are at least aimed in that direction, those plans include tax increases in other areas that disproportionately fall on middle- and low-income Kansans, Democrats say.

    "It's just a classic tax shift," said House Minority Leader Paul Davis, D-Lawrence. "We are raising taxes on middle income Kansans in order to pay for tax cuts that primarily benefit the wealthy."

    The tax plan approved by conservative Republicans in Senate would cut income taxes by $1.87 billion over five years, according to a comparison of various tax plans by the non-partisan Kansas Legislative Research Department.

    But that plan keeps in effect the 6.3 percent state sales tax, which under current law is supposed to decrease to 5.7 percent on July 1. Brownback has also wanted to keep the sales tax at 6.3 percent. Making that higher sales tax rate permanent will cost taxpayers $1.5 billion over five years, the analysis said.

    And higher sales taxes are more of a burden on poor families because the tax takes a greater portion of their incomes as compared with wealthier people. In addition, Kansas is one of the few states that charges the full sales tax on groceries.

    The Senate plan also phases out most income tax deductions as income tax rates drop, which will increase tax revenue by another $910 million over the five years, according to the legislative staff analysis. Including some other proposed changes, the Senate bill would net the state $497 million in new revenues during the next five years.

    "It actually takes more money out of the pockets of Kansas families than it puts in during the first four years of implementation," said Sen. Tom Holland, D-Baldwin City. "Even more disturbingly, the bill reneges on the promise that the Kansas Legislature made to sunset the temporary sales tax," he said.

    The temporary increase in the sales tax was passed in 2010 by a coalition of Democrats and moderate Republicans to shore up the budget, which had been decimated by revenue shortfalls during the recession.

    But Brownback and Republican leaders have argued for the past two years that reducing the income tax is key to stimulating the economy.

    The plan approved by Republicans in the House allows the state sales tax to decrease to 5.7 percent on July 1 and would chip away at the income tax if annual state revenues increase more than 2 percent. Itemized deductions, such as the popular home mortgage interest and property tax deductions, would start to be reduced.

    Davis has called the plan a $400 million tax increase because the lost deductions over five years will bring in more tax revenue than the proposed cuts, according to the legislative analysis.

    Rep. Richard Carlson, R-St. Marys, and chairman of the House tax committee, said that criticism was "highly misleading" because it did not take into account the lowered sales tax.

    Carlson defended the House plan, saying that lower income Kansans will benefit by the reduction in the sales tax, and lowering income tax rates.

    But Davis said the House and Senate proposals are being made simply to keep afloat last year's tax cuts signed into law by Brownback.

    "It's a tax increase that is being forwarded because of this reckless income tax reduction bill that was passed last year that we cannot afford. It is way too big," Davis said.

    Last year, Brownback signed into law cuts that exempt the owners of 191,000 partnerships, sole proprietorships and other businesses from income taxes. In addition, the law decreased the individual income tax rates, with the top rate dropping to 4.9 percent from 6.45 percent, and the lowest rate from 3.5 percent to 3 percent.

    Comments

    JohnBrown 1 year ago

    What's interesting about Republicans in congress repealing O'Bama Care is that they always include a proviso that excludes themselves.

    JohnBrown

    0

    Agnostick 1 year ago

    The Born-Again Americans are experts on the West Coast scene. Heed their warnings!

    1

    George_Braziller 1 year ago

    This IS all just a tax shift. The State won't collect as much revenue from income taxes, so the State funding for Counties and cities will be cut, resulting in local and County property taxes being raised to make up for the loss of funding from the State.

    2

    justanotherbumonthebus 1 year ago

    Bums and leftist clowns are in favor of wealth confiscation. Honest hard working folk want to pay their own way. But as Romney pointed out very clumsily, half are bummy clowns and half are not but it didn't stick. So we have Barry again. Yippee!

    0

    Patricia Davis 1 year ago

    Will western Kansas ever wake up and see they are being left in the crapper?

    3

    Paul R Getto 1 year ago

    Tax cuts really = budget cuts and reductions in service. This is the real goal of the ALEC/Tea Party agenda. Local units cannot raise taxes enough to make up the difference..

    3

    toe 1 year ago

    There is plenty of money in Lawrence for increased sales taxes. All bond issues, tax abatements, and local sales tax hikes are approved with wide margins. Even when state taxes were higher, this had no effect on the taxing of Lawrence residents. Taxes give government workers jobs and Lawrence is so full of government workers, all taxes pass easily and with glee.

    2

    verity 1 year ago

    Looks like there are some purposeful misunderstanding and changing of the subject going on here.

    The Democrats objection is that taxes on the lower income people are being raised to finance lower (or no) taxes for the higher income people and businesses.

    And some have no skin left to put in the game. They done been skinned and left to die while the Kochs et al drive by on the other side of the road---or fly overhead.

    8

    lawrenceguy40 1 year ago

    If you work hard and are a contributing member of society then you have nothing to fear from Governor Brownback's tax reductions. If you are a bum and like to live off of taxes stolen from your neighbors then you may end up with fewer of those ill-gotten gains.

    Liberals never understand that people have choices. They can work and be as wealthy as they wish given the conditions that the Governor and the GOP are providing in Kansas, or they can sit on their rears and complain about how the "rich" are not taxed enough to pay for their moocher lifestyle. You are either a giver or taker. In Kansas it is now the time that the givers are rewarded and the takers are made to feel the pain. The liberals on the hill will soon be feeling it and I personally cannot wait to see them fall.

    4

    tomatogrower 1 year ago

    Isn't it interesting how IKU57 has turned this discussion around to Obamacare, and not about how the new Kansas Republican party is waging war on the middle and poor classes, so their rich buddies can have their cake and eat it too. They will still get good roads to transport their goods (even though their trucks tear up the roads faster than your car), police who will protect their property (they have a lot more property to protect), and firefighters who will save their property from damage (again, they have more property), but they won't have to pay for it. You will pay for it for them. Who is really waging a war of classes? Wake up, people. And quit letting IKU57 distract you from the real issues.

    9

    elliottaw 1 year ago

    Lets get rid of sales tax on groceries (1 of only 5 states that charge for it) and then meet in the middle on the sales tax, move it to 6%

    7

    ibroke 1 year ago

    we all have to have some skin in the game

    3

    yourworstnightmare 1 year ago

    Cutting the income tax while at the same time keeping sales tax high and removing middle class tax breaks sure seems like a redistribution of tax burden to me.

    The GOP want folks to believe that there is a free ride mediated by economic growth. Clearly this is not the case, and they clearly don't even believe it themselves.

    Pity the poor Kansan. Abolishing abortion is so important to him that he will sacrifice his own economic well-being.

    8

    skinny 1 year ago

    How about everyone just pay their own way!!! Problem solved!

    Everyone always wanting something for nothing! That's not how it works!

    No wonder some of Doctors in this town stopped taking Medicaid. Do you really think all these doctors went to school for ten years just so you all could have free healthcare??? NOT!

    3

    Michael LoBurgio 1 year ago

    Affordable Care Act extended free preventive care to 71 million Americans with private health insurance

    http://shar.es/eytcW

    9

    IKU57 1 year ago

    Not to mention, Democrats lack of concern for Doctors retiring because of Obamacare.

    http://www.everydayhealth.com/senior-health/more-docs-plan-to-retire-early.aspx

    More Docs Plan to Retire Early Six in 10 physicians said it is likely many of their colleagues will retire earlier than planned in the next 1 to 3 years.

    By David Pittman, Washington Correspondent, MedPage Today

    THURSDAY, March 21, 2013 (MedPage Today) — Most physicians have a pessimistic outlook on the future of medicine, citing eroding autonomy and falling income, a survey of more than 600 doctors found.

    Six in 10 physicians (62 percent) said it is likely many of their colleagues will retire earlier than planned in the next 1 to 3 years, a survey from Deloitte Center for Health Solutions found. That perception is uniform across age, gender, and specialty, it said.

    ....and yet Brownback is hurting middle class. o.0

    3

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