Wichita Eagle: Tax proposal benefits big companies

THE WICHITA EAGLE
January 24, 2012
By Brent Wistrom
Report: Governor’s tax proposal would benefit big companies

TOPEKA — Gov. Sam Brownback’s tax reform proposal would be a big bonus to large companies and is unlikely to create new jobs, according to a new report by the Center on Budget and Policy Priorities, a nonpartisan think tank branded as liberal by many conservatives.

The report says Brownback’s proposal to eliminate non-wage income taxes for limited liability corporations, sole proprietorships and subchapter S corporations would make Kansas the first state in the country to exempt income that isn’t taxed at the corporate level and passes through to business owners.

It says that could benefit companies that hire few employees or none at all, including some with owners outside Kansas.

“Many pass-through businesses are very large, and a substantial share of the profit that would be tax-exempt under the governor’s proposal would be earned by large businesses, not small ones,” the report says. Secretary of Revenue Nick Jordan said his department used nationally recognized economic models and saw the potential for 20,000 new jobs over eight years on top of natural growth. He said the Center on Budget and Policy Priorities report isn’t based on facts.

“Go to Main Street anywhere in Kansas and ask the small business owners there if they file their business income on their personal tax forms. They will say yes,” he said via e-mail. “These are the folks the plan is focused on helping; they are everyone from our farmers and mom and pop stores trying to grow their businesses to high-tech startups and traditional manufacturing shops. They may employ one person or 100 but they form the backbone of our state’s economy.”

The center’s report also notes the plan proposed by House Republicans and says that it, too, misleads people to believe the tax exemption is geared toward small businesses. It says many businesses exempt from tax under Brownback’s proposal are used as investment vehicles, and it cites a U.S. Treasury Department study that showed 88 percent of the owners of such businesses spend less than $10,000 on payroll or contract labor.

“The major beneficiaries of such a giveaway are unlikely to be the small businesses and job creators that Governor Brownback says he is intent on helping,” the report says. “Instead, the benefits would flow in great measure to large, established businesses, some of which don’t even have employees.”

In addition to eliminating income taxes on non-wage business income for limited liability corporations and sole proprietorships, the governor’s proposal would reduce tax rates overall, eliminate some tax credits and itemized deductions, and keep the state sales tax rate at 6.3 percent.

KC Star: Tax plan hits impoverished the hardest

KANSAS CITY STAR
January 17, 2012
By Brad Cooper
Brownback tax plan would hit impoverished Kansans the hardest

TOPEKA — The numbers paint a stark picture of the haves and have-nots in Kansas Gov. Sam Brownback’s new tax plan.

More than a half million tax filers — earning less than $25,000 a year — will pay an average of $156 more in income taxes under the governor’s plan to overhaul the state tax code. By contrast, roughly 21,000 taxpayers — making more than $250,000 a year — will see an average cut of $5,200 a year in their tax bills.

Taxpayers somewhere in the middle, earning from $50,000 to $75,000 annually and comprised of 185,692 filers, would pay $282.90 less on average. [Read more…]

Sacramento Bee: Abolishing a state income tax is easier said than done

On Sept. 24, 1980, a few weeks before Ronald Reagan was elected president, Alaska Gov. Jay Hammond signed into law a bill abolishing his state’s personal income tax. In the past 31 years, no other state has taken that step. But lawmakers in Kansas, Missouri and Oklahoma are talking seriously about it.

In Missouri, supporters of a constitutional amendment to eliminate the personal income tax began collecting signatures last month to place their initiative on the ballot next year. In Oklahoma, Republican Gov. Mary Fallin and key legislators have endorsed the concept of ending the tax. In Kansas, Republican Gov. Sam Brownback is expected within weeks to propose a plan to cut income tax rates, possibly with the eventual goal of getting rid of the tax entirely.


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KDOT Secretary Miller to leave KDOT at year-end

Here is the text of an e-mail she sent to KDOT employees:

This isn’t news I’m eager to deliver, but I wanted you to hear it from me. I met with Governor Brownback yesterday to tell him that I’m planning to leave KDOT at the end of the year to go to work for Cambridge Systematics, a national transportation planning and policy firm. I’ve been struggling with this decision for several weeks and I didn’t make it easily. While it’s a great opportunity, I know that I’m leaving the best job I’ve ever had at an agency that I love.

While there is never a perfect time to make this kind of transition, this feels like the right time. One of the reasons I stayed on after the election was to get TWORKS launched. I feel good about getting that done and appreciate very much Governor Brownback giving me the opportunity.

I continue to hear great things about KDOT as I travel the state. I gladly accept the praise on your behalf, but remind people that our success is truly the result of an agency-wide team effort; all of us working together for the people of Kansas. I will miss that work, but know you will maintain the high level of service that people have come to expect from KDOT.

Thank you for being the kind of co-workers that make it hard to leave.

Wichita Eagle: Plans could reshape how much of your money goes to Kansas

TOPEKA —State tax code. Just the phrase may make you want to stop reading and do something more exciting, like eat cold oatmeal.

But for most Kansans it means thousands of dollars a year in income, sales and property tax that goes to state coffers to pay for everything from roads to government employee pensions.

Who pays these taxes, how much they pay and who benefits may be about to change.

Gov. Sam Brownback has made clear he wants to alter the status quo in hopes of encouraging economic growth and retaining or adding residents.

It’s unclear what he and an ad hoc task force of economists and business leaders who have been meeting privately will present in coming weeks. But he and other high-level appointees have hinted at reductions to individual and corporate incomes tax rates, prompting Democrats to warn of the dangers of reducing a revenue stream that makes up about half of the state’s general fund.

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Wichita Eagle Op-Ed by KEPC executive director:’Economic freedom’ isn’t the only ingredient

Lower taxes, spending cuts and elimination of government regulations often are cited as a sure path to growing jobs and the economy in Kansas. “Economic freedom” usually is shorthand for this recipe for governing.

Reliable research does support the notion that healthy economies are relatively open, supporting the free movement of goods and capital. However, the world’s major economic-growth theories recognize other equally important ingredients to wealth creation and employment expansion. We should not ignore them.

Read more here.

KC Star Editorial: Bait-and-switch tax shift could hurt many people

Conservatives in think tanks and state legislatures have long fantasized about a day in which citizens and businesses would pay little or no state taxes on incomes or earnings.

Those dreamers now have an ally, Sam Brownback, in the governor’s office in Kansas. In Missouri, they have a benefactor, Rex Sinquefield, who likes to sink millions of dollars into pet projects.

That kind of firepower should prompt a wake-up call in both states. While no one likes paying taxes on the fruits of their labor, jettisoning the income tax would result in higher prices on goods and services and would likely force even more drastic cuts to public education and other services.

Both scenarios would be ruinous for poor and-middle-income households.

NY Times: In Texas Jobs Boom, Crediting a Leader, or Luck

HOUSTON — Texas is home to at least one-third of the jobs created nationwide since the recession ended. The state’s economy is growing about twice as fast as the national rate. Home prices have remained stable even as much of the country has seen sharp declines.

Is Texas lucky, or has the state benefited from exceptional leadership? As Gov. Rick Perry campaigned Monday in Iowa for the Republican presidential nomination — with the economy dominating the national political landscape — the answer to that question is central to his candidacy.

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Wichita Eagle Editorial by Bernie Koch: Tax cuts aren’t magic formula for growth

Two studies recently ranked the states on their economic performance and outlook, reaching vastly different conclusions about Kansas.

The American Legislative Exchange Council’s “Rich States, Poor States” study ranked Kansas 27th among the states in overall economic outlook. The study concluded that low taxes and low regulatory burdens are the keys to a strong state economy and that state income taxes should be eliminated.

The “Rich States, Poor States” study is useful, but it’s a narrow approach to the evaluation of economic competition. Respected empirical studies indicate other factors to be as important, if not more so. These include infrastructure and equipment, labor efficiency, education and innovation.

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KWCH Wichita Channel 12: Kansas Ranked 11th in ‘Top States for Business’

A new study out today ranks Kansas as one of the top states for businesses. The state was the eleventh best in the nation according to new business station CNBC.

The state got high marks for workforce (#13), business friendliness (#14), and cost of living (#7).

Local economic development group, Kansas Economic Progress Council, which represents a number of businesses and chambers of commerce around the state, says that the study shows businesses look for both low taxes and quality of life when relocating to a state.

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