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Archive for Wednesday, May 22, 2013

Republican tax plans would increase state revenue, analyses say

May 22, 2013

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— Tax plans being considered by House and Senate Republican leaders would increase tax revenue coming to the state by $497 million to $821 million over a five-year period.

The proposals call for higher sales tax and lower income taxes, but would produce a net gain of tax revenue over the next five years over current law, according to analyses by the Kansas Department of Legislative Research, which are being used by legislators.

Under current law, the 6.3 percent state sales tax is scheduled to decrease to 5.7 percent on July 1, less than six weeks from now.

The 6.3 percent rate was approved in 2010 as a temporary rate for three years to avoid deep budget cuts during the Great Recession.

But Gov. Sam Brownback, a Republican, and Senate GOP leaders want to make the 6.3 percent rate permanent, saying the revenue is needed to shore up the budget and buy down future income tax cuts.

House Republican leaders have so far been willing to go to a 6 percent state sales tax. Senate Republicans countered on Wednesday with 6.25 percent, and 5.7 percent for groceries. More negotiations were scheduled for Thursday.

The various scenarios also reduce or eliminate itemized deductions, and significantly cut standard deductions while ratcheting down income tax rates.

Depending on the specific plan, the net effect is to bring in more revenue to the state, ranging from a cumulative $497 million to $821 million over a five-year period.

Democrats, including Sen. Tom Holland, D-Baldwin City, call that a tax increase. "It's a shifting of the tax burden from higher-income people to middle-class and lower-income people," Holland said.

Sales taxes take a larger portion of the budgets of low-income earners because they are paying the same rate for basic items, such as a gallon of milk, as high-wage earners.

State Rep. Arlen Siegfreid, R-Olathe, who is a member of the House-Senate conference committee working on the tax plans, said the increased revenue was needed because of the deep tax cuts signed into law last year by Gov. Sam Brownback.

"There have to be adjustments made to keep essentials going," he said.

Last year, Brownback and the Legislature approved cuts in income tax rates, the elimination of income taxes for the owners of 191,000 business and the repeal of several tax credits aimed at helping low-income Kansans.

The House's chief tax official, state Rep. Richard Carlson, R-St. Marys, noted that in fiscal year 2018, which starts July 1, 2017, the amount of revenue starts to decrease to the state as the income tax cuts are ratcheted down.

However, the five-year spread shows net gains to the state.

"It has always been a tax increase until you get to 2018," said state Sen. Laura Kelly, D-Topeka. And, she said, the state analyses of the various tax plans don't show what will happen with local property taxes. Kelly argues that as the state fails to increase base state aid per pupil for schools, local property taxes will start to increase to fill in the gap.

And she noted that as the income tax cuts get larger, the budget gets tighter in future years. "And that is without a nickel more for schools or state employee pay raises," she said. "This is just flatline, and then we are still in the hole," she said.

Comments

Alyosha 11 months ago

Kansas Republicans, and many, many citizens, are way behind the curve in terms of fact-based economic and tax policy. This is not surprising, but it is a shame. That's what happens when your politics and emotions take precedence over your thinking.

Here's Bruce Bartlett on "The Bush Tax-Cut Failure." Bartlett held "senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul." His findings are directly relevant to this topic in Kansas.

http://economix.blogs.nytimes.com/2013/05/21/the-bush-tax-cut-failure/?pagewanted=all

"It is hard to find even a reputable conservative economist willing to say anything good these days about President Bush’s tax and economic policies. In 2009, the Harvard economist Dale Jorgenson said he saw no redeeming features in them."

"In 2011, the economist Alan Viard of the conservative American Enterprise Institute told Bloomberg News, “The effects of the Bush tax cuts on growth were ambiguous at best.” He added, “They were not much of a poster child for pro-growth tax policy.” "

"Even Mr. Hubbard now seems unwilling to defend the tax cuts he shepherded into law. Earlier this year, he was asked by The New York Times what he thought about the repeal of many of the Bush-era tax cuts on Jan. 1. He said many of those tax cuts were no longer relevant to our tax and economic problems."

"Mr. Hubbard even suggested that higher revenues, long a Republican no-no, were not a bad thing. “We need a tax system that can promote economic growth and raise the revenue the American people want to devote to government,” he said."

Until the people of Kansas realize that the interests of Koch brothers, ALEC, the Club For Growth, et al. are not their interests, the people's government will continue to be hobbled and harmed.

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verity 11 months ago

Did I miss something? Where's the analyses? Who did it?

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donttreadonme 11 months ago

So how is increasing state revenue at least $497 million over 5 years not a tax increase?

And then higher property taxes on top of that?

Doesn't sound very conservative to me.

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Dont_Tread_On_Me 11 months ago

Somebody please define fair when it comes to taxes?

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George_Braziller 11 months ago

And the train keeps speeding faster and faster toward the canyon without a bridge.

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lucky_guy 11 months ago

So DT we had an income tax in 2010 and we also had less than average local taxes according to you numbers we should have left everything alone, go figure. You keep coming back to say that no income tax states are so great but you don't seem to want to admit things like the other states have oil and oceans and Dow Chemical and oceans or tourism and oceans, etc. Also you don't seem to want to admit that high local taxes are what the citizens of those no income tax states complain about. To attribute every good thing to low taxes reminds me of a story that Abe Lincoln once supposedly told: A boy runs in to his father and says that he say his sister and the farmhand in the barn and both had their pants down. The boy then exclaimed that the two were going to pee on the father's hay. The father replied that the boy had his facts correct but his conclusion was all wrong.

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gatekeeper 11 months ago

They'll just keep pushing people to go to KC MO for big purchases. Their rate is only 4.225%. Guess where many of us go when we need a new appliance, car, etc...

Take a good look at what other states taxes are. http://www.salestaxinstitute.com/resources/rates

I sure hope these idiots in charge right now realize how many moderate republicans can't wait for the next election to boot their selfish, Koch controlled butts. I know so many, mainly older (retirement age and above) that have had it and want Sam and the current congress gone. Everyone, except the ignorant that will always vote R because they think it's the party of God and no facts will ever make them think different, are sick and tired of Bozo and his clown circus. If these morons somehow stay in power, they're going to start seeing many of us leave this state. I know many in my family are already considering it and one has made the move. CO is looking really good and moderate republicans are accepted there.

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Liberty275 11 months ago

All personal taxes should be consumption taxes.

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Tracy Rogers 11 months ago

Different tax rates for food versus everything else?? Do they realize what kind of a logistical problem they would be to implement?

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heights 11 months ago

...better get your checkbook out for property tax increases. Wonder who will get exempted from those? But hey, I'm sure they have a logical endgame for all of this. One that keeps Kansas competitive, fiscally sound and a great place to live free. I'll believe it when I see it. Until then, descent into madness.

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Dave Trabert 11 months ago

General Fund spending has increased quite a bit in recent years. FY 2011 saw spending jump 7.6% from $5.268 billion to $5.667 billion; that occurred under Gov. Parkinson. Then Gov. Brownback increased spending 8.1% to $6.126 billion in FY 2012. Legislative Research says FY 2013 spending will be $6.098 billion (a 1.07% increase).

Kansas' General Fund spending per-capita is the highest in the region and much greater than states with no income tax. See http://www.kansaspolicy.org/kpiblog/105785.aspx

Income tax reform can be implemented without raising sales tax or arbitrary across-the-board spending cuts. See http://www.kansaspolicy.org/researchcenters/budgetandspending/budgetandspendingstudies/104136.aspx Spending must come down, but it should be done by making services more efficient.

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lhenry69 11 months ago

I'm so tired of Sam slamming the less fortunate.....I'll be glad to see him gone after the next election.....he is creating a mess and can't see it.....like they say...."What goes around comes around.."

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rtwngr 11 months ago

I have never been a proponent of sales tax on food items. I am in favor of a higher sales tax on other consumables like cigarettes, liquor, automobiles, etc. I applaud what this legislature has done to bring uncontrolled spending to a halt.

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Lynn731 11 months ago

I would much prefer lowering property taxes, as opposed to lowering income taxes.

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question4u 11 months ago

"Tax plans being considered by House and Senate Republican leaders would increase tax revenue coming to the state by $497 million to $821 million over a five-year period."

But it's OK, because that increased tax revenue is materializing out of thin air. After all, these people promised not to raise taxes. So if taxes aren't being raised but tax revenues will be going up then this is clearly just a sign of God's beneficence to Kansas. Tax revenue is even better than loaves and fishes, so we should all be thankful for this miracle.

Make sure to say a special prayer for Sam, too, as you pay state income tax on an additional $4000 of your income if you're married and filing jointly. We couldn't have had the reduction in standard deductions if not for Sam's leadership. Don't forget to praise Sam as you pay more sales tax on your purchases in Kansas (and soon on your online purchases too!). Don't forget to thank Sam if you're a college student and paying higher tuition next year.

Yes, Sam is truly miraculous. Raising tax revenues without increasing the burden on working Kansans (except for the increased sales tax, reduction in standard deduction, and increases in local property tax to make up for state cuts to schools) is almost too good to be true.

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freeadvice 11 months ago

Hey! I thought the teapub mantras was "NO TAX INCREASE"!! evilsam has said over and over he is not cutting essentials only waste. Looks like they are both hypocritical liars!! It's going to be tough to spin a tax shift to blame the D's this time.

Guess what teapubs mean is NO TAXES for them, the little people can pay em. evilsam's idea of waste is money he can't send to the kochs. Good thing (for them) the majority of Kansas voters are stupid and can't see past the R.

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yourworstnightmare 11 months ago

Fairy tales. Fables of the deconstruction.

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Larry Sturm 11 months ago

Who is going to pay the higher sales tax the people the people that can afford it the least.

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