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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

Larry Sturm 1 year, 7 months ago

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

Hooligan_016 1 year, 7 months ago

Yep, sales tax is highly regressive and will be a greater burden on lower income individuals and families.

Orwell 1 year, 7 months ago

They're cutting taxes, but only for the "right people."

question4u 1 year, 7 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.

Charles L Bloss Jr 1 year, 7 months ago

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

rtwngr 1 year, 7 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.

Bob_Keeshan 1 year, 7 months ago

I'd love to see your evidence that uncontrolled spending has been brought to a halt.

Maybe Dave Trabert will stop by to spin some lies for you. The truth is state spending from the general fund has gone up big-time under Brownback.

Alyosha 1 year, 7 months ago

Define "uncontrolled spending."

By definition, spending by a state government is "controlled," in that appropriations must be made via laws enacted by the legislature. Any revenue raised and money spent is strictly accounted for.

Perhaps a more accurate term, from your perspective, would be "spending I disagree with."

It's an inalienable right of the people, through their elected representatives, to raise revenue via taxes and spend that revenue on the public good. Perhaps it's representative government you have a real issue with.

lhenry69 1 year, 7 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.."

Dave Trabert 1 year, 7 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.

William Weissbeck 1 year, 7 months ago

Hey, I like having basements, unlike our neighbors.

chootspa 1 year, 7 months ago

That's because our school funding formula operates differently than surrounding states and relies more on general fund spending than local taxes. As you well know. This is why people cannot trust anything you say.

"The chart is accurate but could paint a misleading picture of school spending relative to the other states because it doesn’t take into account that they use different tax plans to fund their schools.

Kansas relies more on state aid, primarily from statewide income and sales taxes, to fund its schools. The neighboring states get more of their school money from what the government calls “local revenue,” which comes primarily from property taxes levied within school districts.

So while Kansas leads the group in state aid, it’s the second lowest on the list for local revenue.

Overall, Kansans pay about 6 percent less in school taxes than Nebraskans and 4 percent more than Coloradans. Missouri and Oklahoma school taxes are substantially less than in the other three states.

Sawyer, who was House majority leader in 1992 when the decision was made to shift funding from local property taxes to the statewide tax base, said it was done on purpose and for good reason."

Read more here: http://www.kansas.com/2013/02/16/2679638/governors-numbers-come-under-question.html#storylink=cpy

Alyosha 1 year, 7 months ago

"Kansas' General Fund spending per-capita is the highest in the region and much greater than states with no income tax. See"

So what?

You seem to believe that spending by definition is bad.

The people of Kansas have, and will again, disagree with you, and will, through their elected representatives, raise revenue as they see fit and spend it as they see fit. Especially on core government functions clearly outlined in the Kansas Constitution: education, the public good, aid for those deserving assistance.

Try to construct a coherent argument that spending by the people's government on the people's needs is, in the American political tradition, wrong.

It seems you have a problem with the Kansas Constitution. One wonders why you live in Kansas.

heights 1 year, 7 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.

Dave Trabert 1 year, 7 months ago

Local property taxes would only increase if local government and schools choose to continue doing so. In fact, local taxes in states with no personal income tax are actually lower than other states.

In 2010 (most recent year local data is available), per-capita local taxes in the states without an income tax were $1,763 while the average for all other states was $1,829. Kansas was at $1,725. See http://www.kansaspolicy.org/researchcenters/budgetandspending/budgetandspendingdatawarehouse/105695.aspx

Alyosha 1 year, 7 months ago

"In fact, local taxes in states with no personal income tax are actually lower than other states."

Again, so what? Implicit in your statements appears to be a critique of government spending itself; you seem to favor lower spending by the people.

One wonders why you have a problem with the people's government enacting the people's will and goals through their elected representatives, including raising revenue and spending that revenue on the public good.

Your real issue seems to be with the people enacting the public good via their representative government. That's a chilling belief set you have there.

chootspa 1 year, 7 months ago

Post hoc ergo propter hoc.

Different states have different tax formulas for different reasons. Changing one aspect of the KS code doesn't turn the state into Alaska any more than putting bun in your hair would turn you into Sarah Palin. If you've got tourism, oil, business, or other taxes filling up the state coffers instead of personal income taxes, you don't necessarily need higher local taxes.

Alyosha 1 year, 7 months ago

"Post hoc ergo propter hoc."

I love it when a commenter points out a logical fallacy. Well done, and keep up the good work. Don't let charlatan commenters get away with their sloppy thinking and fallacious claims and arguments.

heights 1 year, 7 months ago

The point about the "endgame" is that services will still need to be provided-streets, roads, schools, county and city workers, emergency personnel, police, etc. at local and state level. When the state declines to collect taxes and begins to cut services in so many areas of our lives as they are now, there will have to be money raised. Again, what is the logical endgame?

The exemption comment made also a what-if question. What prevents the state house from deciding to block local governments from raising property taxes if they have no other option-certainly not out of the realm of possibilities. This legislature has seen fit to get involved in all manners of things that local communities should be deciding-funny way for the party of less government to act, but it seems a lot of things being done do not make sense.

Watching the cuts and the burden shift, it will take years to fix the damage, and again, I ask-what is the endgame to all of this? Rural communities are hurting, drought is hitting farm communities hard, education which is a ladder to opportunity is being cut, cities are having to make extreme choices about who the winners and losers are as it relates to funding. The legislature and governor just keep saying it will all work out-that I'd like to see.

Tracy Rogers 1 year, 7 months ago

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

William Weissbeck 1 year, 7 months ago

Actually that's now pretty common in other states. In Illinois it's 2%. In Indiana it's zero! Modern cash registers don't have a problem. If anything, zero on food would be a concession to the people the GOP doesn't care about.

Liberty275 1 year, 7 months ago

All personal taxes should be consumption taxes.

Alyosha 1 year, 7 months ago

Nice claim. Now, construct an ethically persuasive argument why.

gatekeeper 1 year, 7 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.

sciencegeek 1 year, 7 months ago

Here's the problem, gatekeeper: The Koch political machine has shown its willingness to lie, twist, demonize and slander anyone who isn't willing to do their bidding. Therefore, there aren't any moderate Republicans with the willingness or the cash to take them on. The few legitimate Democrat candidates have even less money and are being bashed and traumatized by the Brownback machine. The easiest way to stay in power is heavy-handed destruction of anyone who may rise to oppose you.

The only difference between the Koch/Brownback regime and other dictators is that they use money instead of bullets.

Anthony Mall 1 year, 7 months ago

Smart guy... If you buy a car out if state you don't pay taxes in that state! You pay taxes on the car when you get your tags! Thanks for proving how liberals think!

skull 1 year, 7 months ago

Hey smart guy...ever heard of sales tax?

Alyosha 1 year, 7 months ago

"Thanks for proving how liberals think!" That's a wild over-generalization there.

Thanks for pointing out how sloppy thinking and inaccurate writing work!

lucky_guy 1 year, 7 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.

Dave Trabert 1 year, 7 months ago

We had very high state taxes compared to most states, right up to 2012. See http://www.kansaspolicy.org/researchcenters/budgetandspending/budgetandspendingdatawarehouse/d105648.aspx?type=view. We also had very poor economic performance. See http://www.kansaspolicy.org/researchcenters/budgetandspending/budgetandspendingdatawarehouse/d105772.aspx?type=view

Oil and oceans have nothing to do with tax levels. State and local taxes are determined by state and local spending. Kansas spends more than most and therefore taxes more than most (and grows less).

State taxes need to be reduced in order to create better economic growth and more jobs.

chootspa 1 year, 7 months ago

Again with the propter hoc errors. Reducing taxes will not create better economic growth and more jobs, no matter how many times you, ALEC, and your (now state tax free) Koch sponsors make the claim. Go sell snake oil to someone else.

http://www.goodjobsfirst.org/sites/default/files/docs/pdf/snakeoiltothestates.pdf

dwendel 1 year, 7 months ago

Chootspa - I just want to thank you for taking the tool to school whenever Dave Trabert brings his bilge to this forum. With all that tax-free money, you'd think the Kochs could buy a better errand boy.

Sorry Dave - you have the credibility and get the respect here you deserve. N-O-N-E. And if karma is real, you're in for a rough road ahead. Keep trying though. You might eventually succeed in pushing one of those camels through a needle.

chootspa 1 year, 7 months ago

Thank you. Always nice to be appreciated.

verity 1 year, 7 months ago

I agree with dwendel. Thank you for your service and keep it coming.

Dave Trabert 1 year, 7 months ago

South Dakota has far superior economic performance compared to Kansas.

Private sector job growth 1998-2012 SD +13.8% KS +1.6% (BLS) Wage & Salary Disbursements '01-'11 SD +51% KS +31% (BEA) Private sector GDP growth 2001-2011 SD +60% KS +44% (BEA) Domestic Migration 1998-2012 SD +1.7% KS -2.9% (Census)

progressive_thinker 1 year, 7 months ago

Cherry picked data. This is the most easily debunked logic flaw. Trabert is a snake oil salesman of the worst degree.

chootspa 1 year, 7 months ago

It's easy to get those statistics when you ignore one third of the state: Cheyenne River, Pine Ridge, Rosebud, and Standing Rock reservations. Unemployment can reach 80% in those areas, which are among the poorest regions in the US.

George_Braziller 1 year, 7 months ago

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

Lisa Medsker 1 year, 7 months ago

For many years, to include through the Right Wing "Golden Era" of Eisenhower, the top earners had a tax rate that exceeded 50%. (At least Federally.) Even people who made low wages could still feed their families. Somehow, the very wealthy stayed that way, even though they didn't have to step on the poor or eradicate the middle class to do so.

verity 1 year, 7 months ago

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

Thomas Bryce 1 year, 6 months ago

Kansas Department of Legislative Research did the analysis. Not at all surprised by their findings.

Alyosha 1 year, 7 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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