Home > Uncategorized > Math and Economics Challenged KS Legislature May Raise Taxes— or End Tax Cuts

Math and Economics Challenged KS Legislature May Raise Taxes— or End Tax Cuts

May 31, 2015

I admit to feeling more than a little schadenfreude in reading yesterday’s NYTimes article titled “To Fill Budget Hole Kansas GOP Considers the Unthinkable: Raising Taxes“. The article could have been titled “Here’s the Proof: Trickle Down Doesn’t Work” or “KS Legislator’s need remedial math lessons” or “The Costs of Bureaucrats, Waste, Fraud and Abuse Are Negligible”.

The back story to this article, described in earlier posts and widely reported in many progressive political blogs, is that KS Governor Brownback and the Tea Party GOP members in the KS legislature decided to cut taxes in the belief that doing so would enable the “job creators” who were hamstrung by taxes and regulations to work their magic and the influx of new jobs would yield more than enough revenue to offset the “punishing” taxes that affected Kansans. It didn’t turn out that way and now, having spent all of its reserves and used every short term budget trick available, the KS Legislature needs to find $400,000,000. One legislator, though, has an explanation for this problem:

Senator Terry Bruce, the Republican majority leader, said that when the cuts were passed, the Department of Revenue gave estimates of how much the changes would cost that ended up being inaccurate.

While initial estimates, for instance, were that the small business tax exemption would affect about 191,000 entities and cost about $160 million, for the 2013 tax year, 333,000 filers took advantage of the exemption at a cost of $206.8 million, according to the Revenue Department.

The last time I looked, 206.8 million less $160 million was $40.8 million… not exactly chump change but FAR short of the $400,000,000 shortfall facing the state. In the meantime, the cuts to education have decimated the  public schools and shredded safety nets… and the $400,000,000 needed will do nothing to restore those cuts OR the various “rainy day funds” Brownback and the KS legislature used to balance recent budgets.

If this tactic were isolated to KS it would be unfortunate to a small group of individuals… but unfortunately WI, NJ, LA, and other states led by Presidential aspirants have all used this playbook and the results have never played out as promised. All of those seeking executive offices should read the inscription on the entry to the IRS office building first stated by Oliver Wendell Holmes: “Taxes are the Price We Pay for a Civilized Society”.

 

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