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Archive for Sunday, May 5, 2013

Revenue secretary says tax cuts are working

May 5, 2013

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— Kansas Department of Revenue Secretary Nick Jordan says recent state tax collections show that Gov. Sam Brownback's tax cuts are working as economic stimulants.

The state collected $25 million in individual income tax receipts last month, or 5.7 percent more than in April 2012.

Jordan said Kansans are able to keep more in their pockets, contributing to economic growth that is offsetting the impact of lower tax rates.

“We’ve predicted that a fiscal environment where Kansans get to keep and invest more of their paycheck would bring economic growth to the state,” Jordan said.

But state Sen. Tom Holland, D-Baldwin City, a critic of the tax cuts that Brownback signed into law last year, said it is too early for the Brownback administration to claim success.

"Let's wait until next year," to analyze the impact of the cuts, said Holland, the ranking Democrat on the Senate tax committee.

Last year, Brownback signed into law cuts in state income tax rates and exemptions from income taxes for the owners of 191,000 partnerships, sole proprietorships, and other businesses.

The recent revenue estimate from state officials and economic experts showed that individual income tax revenue will decrease to $2.4 billion in the fiscal year starting July 1 from $2.85 billion in the current fiscal year. That's a drop of $450 million, or 15.8 percent.

And Holland said Jordan's claim that increased revenue is due to tax cuts undercuts Brownback's call to extend the 6.3 percent state sales tax rate.

The Legislature reconvenes the 2013 session on Wednesday to write a budget and work on tax policy.

In 2010, legislators approved a three-year increase in the state sales tax to 6.3 percent to avoid deep budget cuts as the state struggled during the Great Recession.

The sales tax is set to decrease to 5.7 percent on July 1. But Brownback wants to keep the rate at 6.3 percent, saying the higher rate is needed to balance the budget.

He faces opposition on the left and right.

Democrats say Brownback wants the higher rate in order to provide more income tax cuts for the wealthy while saddling the rest of Kansans with a higher sales tax. Conservative Republican legislators say they won't vote for the higher sales tax rate because they believe the budget can be cut further.

Comments

Liberal 1 year, 7 months ago

It really sucks when you have to admit you were wrong....Apparently some people (Tom) have a hard time with it.

anotherview 1 year, 7 months ago

Sen. Tom Holland is not wrong. It is Nick Jordan who is wrong. (See below)

DScully 1 year, 7 months ago

Well Tom, you ask people next year, after they can no longer receive Homestead refunds, or declare their child care expenses, how they feel about the SB and his tax plan. Nick Jordan is using the smoke and mirror trick, and YOU have obviously fallen for it.

Dick Sengpiehl 1 year, 7 months ago

Agree. Trickle down economics doesn't work , as President Reagan's Budget director said.:Smoke and Mirrors, " he said.

Mike1949 1 year, 7 months ago

He cuts taxes on the rich, and raises taxes on the working man. Let me tell you, if you have money, the difference in taxes doesn't make that much difference. If you are poor, working 40-60 hr. a week, or especially on a fixed income you will notice the extra$50-$100 more in taxes every month.

So it is a take from the blue collar and the poor & disabled and give it to the wealthy. Am I the only one seeing the injustice in this?

somebodynew 1 year, 7 months ago

No, you are not the only one. The problem is those of us that do are outnumbered by the ones who blindly follow BB/Koch/ALEC. Unless people who do see this actually show up to vote next time, we will be stuck with this type of 'stuff' for a long time.

anotherview 1 year, 7 months ago

The article stated that Nick Jordan said the state collected more in income taxes this year because Kansans were able to keep more in their pockets, contributing to economic growth that is offsetting the effect of "lower tax rates".

What lower tax rates? The Kansas tax rates for 2012 and 2011 are exactly the same. The lower tax rates do not take effect until next year. NIck Jordan should know better, since he is the Secretary of the Kansas Department of Revenue.

If Kansas collected more in state income taxes this April over April 2012 it is most likely because of the general improvement in the economy and has nothing to do with any scheduled cuts in Kansas income tax rates.

chootspa 1 year, 7 months ago

That's exactly what I was going to point out. How could the tax cuts have given us more money in our pockets when we have't actually had a tax bill that includes these new tax cuts yet?

Richard Heckler 1 year, 7 months ago

Arthur Laffer works for Sam Brownback thus advises Nick Jordan who is known to say just about right wing anything exactly as Sam Brownback does.

Economist Arthur Laffer, patron saint of tax cuts, is back, with an op-ed in the Wall Street Journal that he hopes will put the kibosh on future plans for government stimulus. Laffer, who had his heyday back in the Reagan years, is best known as the popularizer of the notion that raising tax rates beyond a certain level can actually reduce tax revenues by, among other things, discouraging entrepreneurship. The graphic representation of this idea, though not original to Laffer, came to be known as the Laffer Curve.

But his latest excursion into the public debate has drawn harsh criticism not only from liberal economists like Berkeley’s Brad DeLong but also from stimulus-hating, anti-Keynesian economists you might expect to agree with the Laffer line.

The consensus? Laffer seems to have forgotten, or ignored, some pretty basic concepts in economics. In other words, Laffer is getting laughed off the economic stage.

http://business.time.com/2012/08/09/arthur-laffers-anti-stimulus-curve-ball-is-a-foul/

JayhawkFan1985 1 year, 7 months ago

Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics. Ferris Buellers economics teacher

Dick Sengpiehl 1 year, 7 months ago

Agree. As David Stockman, Reagan's budget director said. "It's all smoke and mirrors", referring to Laughter, woops, Laffer.

rtwngr 1 year, 7 months ago

All of you can look at two states in this country and see the difference in higher vs. lower taxes, California and Texas. California has higher taxes and is at the verge of default all the time. Texas, on the other hand, has a much lower tax rate and their state is thriving. Tom Holland is wrong. Merrill is wrong. Paul R. Getto is wrong. Mike1949 is wrong. anotherview is wrong. Dscully is wrong. All of you pathetic people seem to think that because a person is rich, they stole it from someone else. Therefore the government needs to punish them by confiscating their wealth and handing it over to the people that you determine deserve it. The Keynesian economic model has never worked nor will it ever work.

just_another_bozo_on_this_bus 1 year, 7 months ago

"Texas, on the other hand, has a much lower tax rate and their state is thriving. "

Define "thriving" And does that definition include lower income brackets, or just the 1%?

tomatogrower 1 year, 7 months ago

They have oil, California and Kansas doesn't. Try thinking beyond simple statistics. Besides, California is recovering from yet another no tax, but spend like crazy Republican actor governor. Jerry Brown is again cleaning things up.

jhawkinsf 1 year, 7 months ago

Brownback, Rockefeller, Reagan, Lincoln, Goldwater, Schwarzenegger ... Republicans, one and all. Yet their policies varied widely.

That California actor dude was in no way a Republican in the Brownback sense of the word. He'd be a mainstream Democrat here in the state of Kansas. So, to whatever extent you'd like to say his policies contributed to the mess in California, you might wish for the Democrats here to not follow his lead.

Robert Greenwood 1 year, 7 months ago

You write "All of you pathetic people..." None of the posters are pathetic people. Where do you get that? And how do you know what they "think." No one posting suggested the rich stole from someone else. No one mentioned Bernie Madoff or others of his caliber. None of the posters above suggested the Koch brothers stole oil from Native Americans or overcharged the public. No poster is suggesting the government "punish" the rich or "confiscate" their wealth. You make up the arguements, then disagree with them all the while no one stated the allegations.

I do say the well off should pay their fair share, a higher per cent in taxes than their secretaries. I am including Bill Gates and Warren Buffett in the category of rich and wealthy. Both would agree they can pay their fair share. Those with income above $110,000.00 can afford to pay social security taxes on their income above $110,000.00 per year just as those with incomes under $110,000.00 pay social security taxes on their income. I think it very unfair of you to label those who you disagree with as "pathetic." Project much?

chootspa 1 year, 7 months ago

If your definition of "thriving" includes one out of four children living in poverty and rapidly failing schools, then sure. Texas = Thriving.

JayhawkFan1985 1 year, 7 months ago

Rtwingnut, Texas isn't thriving. I grew up there. Texas is the new Mississippi...last in everything. You drink way too much koolade and watch way too much faux news. Get a life...

weeslicket 1 year, 7 months ago

article: The state collected $25 million in individual income tax receipts last month, or 5.7 percent more than in April 2012.

so the state collected $1.425 million more this year than it did last year. in april, which is taxes due month for most people. at the same tax rates as last year (new rates don't go into effect until july).

overall individual income tax receipts after july (new rates) are expected to drop by $450 million. take $450 million as a benchmark, and divide by $1.425 as a montly benchmark, and see how many month short we are of balancing the books (and that's just for one year).

JayhawkFan1985 1 year, 7 months ago

I'm sure national economic trends don't impact Kansas at all...perhaps we should also be looking at how our border states fared as well to see if the rising tide in Kansas is part of some broader economic trends before we allow brownbackward to claim victory for his ill advised tax policies tat will in the long run ruin our state.

Brett McCabe 1 year, 7 months ago

I never understand why articles like this are printed without answering the obvious next questions: how does this compare to the 49 other states? how does it compare to the nation as a whole? were those taxes collected statewide or were there any "heavy hitters"? What's the overall economic picture of Kansas vs. other states in job creation, poverty levels, etc., etc. Is it any wonder that newspapers are going under?

The national economy is growing - due almost entirely to the stimulus plan and bailouts. Though Kansas seems to have entered a head-long race with South Carolina and Arizona to become the most backward state in America, we too shall enjoy the fruits of an economic policy that saved all of our rear-ends.

usesomesense 1 year, 7 months ago

While I'm pretty fiscally conservative I don't buy Brownback's plan. I'm a business owner and could've elected to change my corporation type to take advantage of these cuts I haven't. Sure, I'd like to have more money and realistically I'd probably be one of those that might use that for expansion. Fact is, I'm already expanding. Fact is that I believe in working for a living and I'm a very hands on business owner. The reality is that if they wanted growth and expansion and more importantly to attract new business to Kansas the tax cuts should be DIRECTLY tied to that activity. The type of corporation that this tax cut is for is mostly benefiting are doctors and lawyers, which don't typically expand and were probably already here.

The only way to see if this is working is to look at how many new businesses there are and how much lower unemployment is. I really wouldn't have a problem with sales tax (although I really believe we shouldn't be taxed in so many directions) if medicine and groceries were exempt - we all have to eat and be healthy. It's way too easy for the current administration to say 'See? It's working!" - other states didn't do it and whatever 'it' is seems to be working there too - so that's not likely to be 'it'.

just_another_bozo_on_this_bus 1 year, 7 months ago

"if medicine and groceries were exempt"

And if many services, such as legal and financial services, were also taxed.

verity 1 year, 7 months ago

1 Are Jordan/Brownback et al really that stupid?

2 Do they think we're all that stupid?

3 Do they care at all what we think because they're high on Koch?

4 Will voters study the issues instead of voting for the person who spends the most money or has the R beside their name or invokes the Christian god the most?

avarom 1 year, 7 months ago

Kansas is on the right track by broadening its tax base and lowering its rates, but should be cautious about favoring some businesses over others. A better path to encouraging economic growth is creating a tax environment that is not overly burdensome and treats all businesses well. Further, while tax reductions can have positive economic benefits, they will cost revenue and will ultimately have to be paid for either by cutting spending or increasing taxes elsewhere.

http://www.gctelegram.com/news/AP--Higher-education

just_another_bozo_on_this_bus 1 year, 7 months ago

If by "broadening," you mean that only the poor and middle class will pay taxes...

yourworstnightmare 1 year, 7 months ago

Pardon me if I am incorrect, but the new lower income tax rates have not yet taken effect.

Jordan is touting tax revenues based upon the previous rate, before the income tax reductions.

usesomesense 1 year, 7 months ago

@your worst nightmare - essentially you are correct. Many whose tax burden was reduced/eliminated really didn't 'feel' that until they filed their taxes. Others may have been conservative - questioning if it was too good to be true. The 'job creation and business expansion frenzy' this is suppossed to create would just be getting started (if at all). This is a dangerous game - touting questionable at best 'math' to push an agenda forward. If that's really what it's from they should feel perfectly safe allowing the sales tax to expire (as was the law).

true_patriot 1 year, 7 months ago

Talk about grasping for straws - we've got the kids on tricycles running a state economy.

Let's look at the actual numbers: They conflated revenue from tax cuts with the new sales tax, actually proving that raising taxes is what's necessary (though of course the highly regressive sales tax hurts the majority of Kansans while having little effect on the elite minority) - but even if you look at the revenue gained, they are actually out there touting an increase of only $1.35 million over this month last year in the face of a staggering and reckless annual revenue reduction of $450 million.

There is simply no way the modest increases from regressive taxes on Kansans who actually work for their wages is going to offset that catastrophic shortfall in order to nab money from most Kansans and route it to the relative handful of the ultra-wealthy.

Bob_Keeshan 1 year, 7 months ago

Those April collections were below the estimates from the Consensus Revenue Estimating group. Estimates that are typically very conservative.

But let's play Nick Jordan's game. Let's look back at April 2011, after the sales tax increase Sam Brownback, the Kansas Chamber, and Nick Jordan called "economy killing".

Between April 2010 and April 2011, individual income tax collections for the month increased by 32%.

Now, perhaps looking just at one month is unfair, so let's look just at the year to date totals in April 2010 compared to April 2011. Income tax receipts were up 9.7% for the year in April 2011 over April 2010.

Hmmmm.... looks like the economy is growing, by Nick Jordan's measurement, considerably slower than it was in April 2011. By the way, the April 2011 collections exceeded estimates by 8%.

Guess the sales tax increase boosted the economy far more than Brownback's income tax cut has...

Lynn Grant 1 year, 7 months ago

And we are to believe figures that come from this administration? Anyone remember Steve Anderson, budget director, and his 2 billion dollar error?

Mike1949 1 year, 7 months ago

Excuse me, but isn't the over all economy improving? Also, we are seeing just the beginning of the returns. Let's see what happens in September or around that time. Of course the republicans are going to claim early victory, then when everything falls apart, they are going to blame someone, probably the democrats, even the judicial system, but they will blame someone other than themselves.

William Weissbeck 1 year, 7 months ago

Can we get any more apples and oranges, here? Last I checked, April is tax filing month. Possibly the increase in receipts is due to people you under withheld for the year and had to pay at the end. Perhaps it just means that more people are working - is that due to Brownback or those policies out of DC? (Or just as likely - independent of both). And these are the "individual" tax receipts - what of the business receipts, and the total revenue taken in? Brownback's tax changes simply now allow pass through of partnership earnings to the individuals. The question is what was lost as a result of the change?

grandnanny 1 year, 7 months ago

How can something be working when the new tax rates have not taken effect yet? Our tax rate was the same this year as last. Just wait until next April.

Cait McKnelly 1 year, 7 months ago

The Dow Jones industrial average just closed at 15,056 points (a net gain of 0.6 percent). This is the first time in history the Dow has closed over 15,000.
Standard and Poor's 500 closed at 1,625 - that's a record, too.
I think that Kansas' "success" has a lot more to do with that than their tax structure.
(It's also pretty evident that Obama has to be the worst "socialist" in history.)

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