October 14, 2016
Since it has become clear that Gov. Sam Brownback’s tax experiment has drained state coffers and shifted the state’s tax burden to lower income Kansans, it’s been puzzling why there’s been so little desire among lawmakers to make a change.
Now we know it might have something to do with the 70 percent of lawmakers who, along with Brownback, personally gain from a tax plan that gives a free pass to businesses.
According to a story in the Wichita Eagle, 35 of the 40 members of the Kansas Senate and 79 of the 125 state representatives have interests in companies that benefit from the 2012 tax plan that created an income tax exemption for businesses. Likewise, Gov. Brownback’s family owns farmland and investments that qualify under the altered tax law.
The next question, then, might be how many jobs these lawmakers/business owners created in the years since this “shot of adrenaline” was hoisted on Kansas.
Brownback’s office didn’t answer questions from reporters, instead allowing spokesperson Eileen Hawley to point to other income tax reductions.
“Every Kansan who pays income taxes has benefited from the governor’s tax policy,” she said.
Likewise, speaker Ray Merrick, R-Stillwell, initially said his company wasn’t a beneficiary of the tax plan, then remembered that it does. Except that he’s paid more in taxes, thanks to a not-often talked about provision that prevents the deduction of business losses from income.
“I’ve paid more taxes since that thing’s gone into effect than I ever paid …because I’m not the right kind of company I guess,” Merrick said.
The story reveals one of the things people loathe about the political process – an approach to lawmaking that seems to place personal gain above the public good. Yet, as the Eagle explains, that’s not universally the case here. Some lawmakers who stand to gain from the tax roll back have also been among its largest critics – and at the forefront of efforts to repeal it.
Whether support for the tax plan is personal gain or a policy philosophy, the result is the same. Sales taxes have been raised to pay for the plan. And as Duane Goossen, with the Kansas Center for Economic Growth, recently pointed out, the beneficiaries of Brownback’s tax plan are largely the state’s wealthiest residents.
Between 2012 and 2013, the tax plan created $700 million in tax breaks in the state. But of that amount, $400 million went to 20,000 tax filers who made more than $250,000. Conversely, before the 2012 tax cuts, the state’s poorest residents – those who made less than $25,000 – collectively received around $16 million in tax credits. A year after Brownback’s tax change, however, that same group paid in $12 million to the state – a change of $28 million.
That’s a $400 million reduction for the state’s richest residents, and a $28 million income tax increase for the state’s poorest residents. And that doesn’t include two sales tax increases that likewise inequitably affect poorer residents.
When the numbers run up against the appearance of personal gain among lawmakers, it’s little wonder that Kansans have been clamoring for a change in Topeka. It seems the next session of the Legislature will look different than the last. Ideally, it will behave differently, too.
Read more from the Hutchinson News here.