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Archive for Monday, November 4, 2013

Editorial: Two sides

In the short term, paying fewer taxes is good news, but Kansans may not be as pleased by the long-term consequences of declining state tax revenue.

November 4, 2013

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There certainly are two ways to look at last week’s report that state tax collections for October were 3.8 percent below projections and 6.7 percent below collections for October 2012.

Kansas Secretary of Revenue Nick Jordan sees that as a positive trend because it means Kansans are paying fewer taxes. “Kansas families and businesses have been given real tax relief for the first time in decades,” he said. “And lower income tax rates are allowing people across Kansas to spend more of their hard-earned dollars as they see fit in the private sector rather than sending them to Topeka.”

That does, indeed, sound like good news, but the other side of the story is that the current state budget is based on those revenue estimates that aren’t being met by tax collections. Tax revenues for October were $18 million below the projections. Where will the money come from to make up that shortfall? Will the state have to push more tax obligations onto local property taxes or will it decide to cut spending on highways, schools or other state responsibilities?

Lower income taxes are a cornerstone of the state’s current financial strategy. Individual income tax collections for last month were 17.4 percent below collections for October 2012. For the current fiscal year, which began July 1, individual income tax collections are down 18.7 percent. The hope, as acknowledged by Jordan, was that Kansas businesses and individuals who benefitted from lower income taxes would plow that money back into the state economy, bolstering business and creating new jobs.

Some new jobs may have been created, but the state’s unemployment rate — while still below the national rate — actually is heading in the wrong direction. It was higher in August (5.9 percent) than it was in January (5.5 percent).

Like many issues, lower state taxes are a double-edged sword. Kansans may enjoy paying less in taxes now, but they may not be so pleased down the road by the consequences of state revenue declines.

Comments

Richard Heckler 5 months, 2 weeks ago

This sure as hell is NOT doing taxpayers any good.

Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss. http://www.jimhightower.com/node/7723#.UkS9vBaTOX0

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Richard Heckler 5 months, 2 weeks ago

Did Brownback being the Bush Tax Cuts from washington D.C, to Kansas?

Cutting taxes when the economy is wayyyyyy down makes zero sense. As some have pointed out the locals will be stuck making up the losses = the bottom line.

Yet the Brownback crew can claim they did not raise taxes no matter that it is their irresponsible actions demanding an increase in local taxes/water rates/user fees or whatever.

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Steve King 5 months, 2 weeks ago

Tonight's the night! You'll see the light tonight!

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Keith Richards 5 months, 2 weeks ago

The Gramm–Leach–Bliley Act was the cause of our financial crisis. Unqualified home buyers and unscrupulous mortgage lenders flooded the market which drove up housing and commercial property values and large banks turned into brokerage houses. Home and commercial property equity sky rocketed which home and biz owners leveraged. The bottom fell out when unqualified buyers began to default which caused the crash of home valuations. Anyone who leveraged their equity became upside down on the house and banks start calling loans because the loans become under collateralized. The blame falls 100% on banks, not tax breaks.

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Steve King 5 months, 2 weeks ago

Yeah, that was yesterday. Today is different. Much different. We're all a lot smarter now. This dog is too far gone. Why else would he be fourth on the list as most vulnerable of all Govs?

And we all remember the lies they (R's) told in 2010 to get elected.

Jobs, Job, Jobs. Our number one priority is Jobs. Jobs, Jobs, Jobs.

I've seen nothing, nothing, nothing.

Then it was to make the President a one term President. How'd that work out?

And try to vote down the ACA? How many times? 40+? At what expense? And then take the Country to the brink of default? Oh what patriots!

And how did that work out?

Oh I do remember that guy on the floor of Congress arguing his point to pass a bill. Then when challenged on his facts (which were bogus) he said it was "wasn't meant to be a factual statement". Really? In the Halls of Congress? To argue passage of a bill? And what was his affiliation?

What a bunch of goofballs. Your crew gave us Palin, Bauchman, Akin, O'Donnell...

Brownback is toast. Get use it.

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Steve King 5 months, 2 weeks ago

Can't wait for next November when we get to see that guy fall on his sword of righteousness. Never met anybody that was never, ever wong. Not even once.

When I read this stuff I keep having this image of Carl Rove on election night. It's just so over the top. Total denial.

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Greg Cooper 5 months, 2 weeks ago

Enough, Mr. Zimmerman.

No more spouting of facts.

No more concluding actual effects from actual causes.

You should be ashamed of yourself. After all, this is Kansas.

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Bob Zimmerman 5 months, 2 weeks ago

C'mon Kevin,

Just look at the data. There's not even correlation (or causation) between tax cuts/increases and US economic performance. I mean...my gosh the US had some of the highest tax rates in history (1950s - 1970s) and these occurred durng the biggest economic growth period in US history!

Plus you fail to even recognize the impact of monetary policy. Two examples:

1) In 1979, Fed chairman Volker raised interest rates to choke off inflation and this caused a recession. However, the low inflation rate had a HUGE impact upon the 1980s growth; ask any economist. Oh yeah...Volker was appointed by Jimmy Carter.

2) In the early 2000s,Greenspan kept interest rates artifically low because the Chinese were buying all the US debt that could be printed. Add in the stupid Bush tax cuts on investment capital, and you had trillion of dollars sloshing around the world with no risk for bad investments and no regulation. THAT'S what led to the bubble in 2008.

Bottom line: Laffer curve is a one trick pony and not an economic theory. That's why only Fox News will present his never-ending silliness about "lower taxes = growth". It's simply not a proven theory.

And Brownback is as stupid for believing it.

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Greg Cooper 5 months, 2 weeks ago

"It all depends on how you define...."

Kevin, the best thing one can do in response to facts is to objuscate the facts by attempting to redefine the facts. You are a master at ignoring facts and substituting rhetoric, hetoric which ignores the essential facts: tax revenues are down, unemployment is not, and the state has fewer dollars to fund its programs.

In what way, Kevin, does your argumentation make those facts any less pertinent to TODAY'S situation? It doesn't, and no amount of spouting neo-Republican nonsense will make the facts change.

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Autie Anderson 5 months, 2 weeks ago

Poppycock I say. The simple reality is that revenues are way down and local taxing entities are left holding the bag. With that comes the prospects and outlook that revenues are not going up. Add into that the fact that working families are ending up paying a higher percentage of their meager disposable incomes in sales tax. I look for local property taxes to start edging up higher as well when the next budget cycles come around. All that Reagan this, Laffer than is nothing but a bunch of hot air. What Brownback's failing tax policy is doing is right now. Today. And it clearly is failing.

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Bob Zimmerman 5 months, 2 weeks ago

Hey Kevin G,

Please explain how Reagan tax increase of 1982, 1983, and 1986 helped to grow the economy.

Please explain how Clinton tax increase of 1993 helped to grow the economy.

Please explain how Bush tax cuts of 2001 and 2003 helped to grow the economy...right before the largest economic crash since 1929.

You see...the Laffer curve can only explain a snap shot in time; depending upon where the economy is on the curve. Sometimes tax cuts/increases won't do anything or the opposite of the goofy conservative doctrine.

Or do we need to cut taxes again on investment capital (the goofiest idea).

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Paul R Getto 5 months, 2 weeks ago

Money talks and BS walks. Gonna be a lot of walking in the next year.

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Michael LoBurgio 5 months, 2 weeks ago

Brownbacks trickle down economics is working just as planned

Since 2011 86 of Kansas' 105 counties have been forced to increase property taxes to fill the gap left by reduced state funding and brownbacks tax cuts for the rich!

Restore Kansas Paul Davis for Governor

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Richard Heckler 5 months, 2 weeks ago

What happens to the tax dollars under Sam Brownback?

Worker's taxes siphoned off by their bosses - Where is the $47 million tax dollars that belong to Kansas taxpayers?

My congratulations to workers in 16 states – from Kansas to Maine to Georgia, New Jersey to Colorado! Many of you will be thrilled to know that the income taxes deducted from your paychecks each month are going to a very worthy cause: your corporate boss. http://www.jimhightower.com/node/7723#.UkS9vBaTOX0

This effort seems part of an organized scheme cooked up in some of those secret ALEC conferences in which Kansas is well represented. Busy designing legislation away from the halls of congress. Hmmmmmmmmmm these meetings are not open to the press or to most taxpaying citizens.

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Richard Heckler 5 months, 2 weeks ago

Nick Jordan may not be completely informed or slightly dishonest. When the cookie jars don't get what they need the taxpayers get tapped for more somehow. It is safe to say that Nick Jordan subscribes to Supply Side Economics or he could not work for Sam Brownback. The same for Arthur Laffer patron saint of tax cuts.

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.

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.

Read more: http://business.time.com/2012/08/09/arthur-laffers-anti-stimulus-curve-ball-is-a-foul/#ixzz2OG2JKGYS

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