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The troubled ‘Kansas experiment’ goes to Washington

Wow, I didn't know all those red states were doing so well...cool! Concerning Kansas though, people are working and it's ridiculous to admonish a state's unemployment number when it's 4.2%.
What is ridiculous is attributing the state's unemployment rate to its tax policies.

The reality is that Kansas has not added more jobs or more businesses than its neighbors, who did not enact the same policies. What it has done is cause tax shortfalls to the tune of around $800 million per year, plus increased regressive sales taxes.

It has not achieved one of Brownback's primary goals -- to stop people leaving Kansas... a problem shared by none of its immediate neighbors.

Instead of companies moving to Kansas, existing companies reorganized as LLCs / LLPs to take advantage of the new tax break.

Meanwhile, they are slashing education programs and raiding highway funding programs. Kansas' government was pretty thin to begin with, so there is no fat to cut -- mostly just muscle. This does not make the state more attractive to businesses.



As I've pointed out earlier concerning tax cuts helping an economy, their sales tax revenue has been spiking as one would expect when the consumers get to keep more of their own money.
Or, it's "spiking" because they increased sales taxes.

The average worker is not, in fact, seeing most of the benefits of the tax cuts. Those personal income tax cuts were immediately offset by the increases in sales taxes.


You're slowly seeing the sales tax revenue take the place of the income tax revenue and if you look at their total revenue, they're pretty close to being on track to have their best year ever in 2017.
Yeah, not so much.

Brownback is now talking about adding taxes on tobacco and alcohol, as well as raid the highway fund again, in an attempt to avoid another shortfall. He wants to cancel a 0.1% tax cut for the lowest tax brackets. He wants to tax rents and royalties. He wants to sell off the future proceeds from tobacco settlements -- funding normally used for Head Start. He wants to put all public schools on the same health plan -- which could save a bit of money, but means removing local control over teacher compensation, as well as unraveling nearly 290 existing agreements.

In order to meet this year's shortfall, he wants to liquidate the state's long-term investment fund, raid the highway fund, and underfund pension programs. He claims the long-term fund will be paid back over 7 years, but based on... what, exactly? How will 7 more years of a fiscal crisis suddenly make revenues increase?

Even after all those changes, the state is projected to have a $869 million shortfall over 18 months.
Kansas Gov. Sam. Brownback proposes tax increases to help fix the state's budget problems | The Kansas City Star

Brownback's plans are an unmitigated disaster. They aren't sparking growth. They aren't encouraging businesses to move to Kansas. They aren't encouraging residents to stay. It's an unmitigated failure.
 
Your statement made absolutely no sense in the context of my post. Do you even know what a regressive tax is?



Let me put it this way. Poor Paul and Rich Ricky have very different incomes and wealth, but they both are limited in how much they can buy by how much they can consume. As such, an income tax benefits Poor Paul and a sales tax benefits Rich Ricky because Poor Paul has to pay a much larger portion of his discretionary income to pay a higher sales tax than Rich Ricky does.

Does that help you understand? If Poor Paul makes 30K a year, paying several hundred dollars a year more in taxes for goods and services impacts him far more than Rich Ricky who makes 100K a year.

Hmm, I think I understand your point, thanks! Now I have a question: Is Poor Paul paying 3.5% in income taxes with a $4,500 standard deduction for single head of household and a 6.2% sales tax is far better off than Poor Paul paying 3.0% in income taxes with a 6.5% sales tax and a $9,000 standard deduction for head of household?
 
Houston actually has a fairly low violent crime rate for a city of its size. The city covers over 500 square miles. Many of the jobs for the metro are indeed in the city proper. Hell it has 3 skylines.



Localities have had to increase their sales taxes dramatically since he took office. It's just under 10% in the city limits where I live for example.

Everyone does everything they can to pay as low of a tax rate as they can. That is why I never criticized Trump for paying little in income taxes. We all try to reduce our taxes. This is why it is moronic to create a tax situation where your residents can easily just drive two miles over the state line to pay avoid taxation on any goods they buy. Its also why it is moronic to have a tax rate lower than your neighboring state when a large percentage of your residents work in that state and thus will then pay you nothing in income taxes. It is not about what is right or wrong, or moral or immoral, its basic math.

Most Dangerous Cities In The United States - WorldAtlas.com
Houston is 20th in violent crimes per 100,000 people.

And it's wise for you to seek lower taxes but moronic for a governor to seek lower taxes for it's residents. You don't seem to believe in paying your "fair share" as many leftists put it, but the rest of Kansas is naturally paying their fair share now through the sales tax.
 
And it's wise for you to seek lower taxes but moronic for a governor to seek lower taxes for it's residents. You don't seem to believe in paying your "fair share" as many leftists put it, but the rest of Kansas is naturally paying their fair share now through the sales tax.

"fair share" has no real definition, and no one can define a Laffer curve with numbered annotation.

Sales taxes are regressive and hit the type of people Trump pretends to be concerned about hardest. If he tries to adopt the failed Kansas model for the country, he will almost certainly end up screwing them.
 
What is ridiculous is attributing the state's unemployment rate to its tax policies.

The reality is that Kansas has not added more jobs or more businesses than its neighbors, who did not enact the same policies. What it has done is cause tax shortfalls to the tune of around $800 million per year, plus increased regressive sales taxes.

It has not achieved one of Brownback's primary goals -- to stop people leaving Kansas... a problem shared by none of its immediate neighbors.

Instead of companies moving to Kansas, existing companies reorganized as LLCs / LLPs to take advantage of the new tax break.

Meanwhile, they are slashing education programs and raiding highway funding programs. Kansas' government was pretty thin to begin with, so there is no fat to cut -- mostly just muscle. This does not make the state more attractive to businesses.




Or, it's "spiking" because they increased sales taxes.

The average worker is not, in fact, seeing most of the benefits of the tax cuts. Those personal income tax cuts were immediately offset by the increases in sales taxes.



Yeah, not so much.

Brownback is now talking about adding taxes on tobacco and alcohol, as well as raid the highway fund again, in an attempt to avoid another shortfall. He wants to cancel a 0.1% tax cut for the lowest tax brackets. He wants to tax rents and royalties. He wants to sell off the future proceeds from tobacco settlements -- funding normally used for Head Start. He wants to put all public schools on the same health plan -- which could save a bit of money, but means removing local control over teacher compensation, as well as unraveling nearly 290 existing agreements.

In order to meet this year's shortfall, he wants to liquidate the state's long-term investment fund, raid the highway fund, and underfund pension programs. He claims the long-term fund will be paid back over 7 years, but based on... what, exactly? How will 7 more years of a fiscal crisis suddenly make revenues increase?

Even after all those changes, the state is projected to have a $869 million shortfall over 18 months.
Kansas Gov. Sam. Brownback proposes tax increases to help fix the state's budget problems | The Kansas City Star

Brownback's plans are an unmitigated disaster. They aren't sparking growth. They aren't encouraging businesses to move to Kansas. They aren't encouraging residents to stay. It's an unmitigated failure.

$800 million per year, do you have a link to that? The total revenue (before refunds) is as follows:

2011 $8,167,864,688
2012 $8,747,136,568
2013 $8,914,449,498
2014 $8,471,295,164
2015 $8,542,289,348
2016 $8,673,261,394
http://www.ksrevenue.org/pdf/ar16a.pdf

And you really think that a .2% raise in sales tax is going to strangle the poor people? They got a .5% reduction in their income tax and their standard deduction about doubled. Is it really that bad?

And you think the dramatic increase in sales tax revenue is due to a .2% increase?
Sales and use revenue:
2016 - $4,235,289,271
(48% of total revenue compared to 31.8% in income taxes)
2015 - $4,043,251,703
2014 - $3,932,921,341
2013 - $3,797,395,634
2012 - $3,712,543,484
2011 - $3,434,299,283 (42% of total revenue compared to 39.7% in income taxes)

So an $800 million increase from 2011 to 2016 is the result of a .2% hike, since the sales tax in 2011 was 6.3%?

And funny, he's projected to do this and that...who cares? Let's concentrate on what he has done.
 
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"fair share" has no real definition, and no one can define a Laffer curve with numbered annotation.

Sales taxes are regressive and hit the type of people Trump pretends to be concerned about hardest. If he tries to adopt the failed Kansas model for the country, he will almost certainly end up screwing them.

You think a .2% sales tax increase is going to strangle a poor person to death financially, esp. after that same poor person got a .5% decrease in their income tax and a doubled standard deduction increase for single head of household? If a poor person can't handle this, what can they do?
 
Hmm, I think I understand your point, thanks! Now I have a question: Is Poor Paul paying 3.5% in income taxes with a $4,500 standard deduction for single head of household and a 6.2% sales tax is far better off than Poor Paul paying 3.0% in income taxes with a 6.5% sales tax and a $9,000 standard deduction for head of household?

Poor Paul has to commute 2 hours to work every day because he can only afford to live outside of town. He has to pay for gas and maintenance on his car. This means because his consumption is higher than Rich Ricky, (who can afford to live in town), and due to higher sales taxes he has to pay more in taxes than Rich Ricky does even though he makes less than a third what Rich Ricky makes.

That is how a regressive tax often works.
 
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Poor Paul has to commute 2 hours to work every day because he can only afford to live outside of town. He had to pay for gas and maintenance on his car. This means because his consumption is higher than Rich Ricky, and due to higher sales taxes he has to pay more in taxes than Rich Ricky does even though he makes less than a third what Rich Ricky makes.

That is how a regressive tax often works.

No, Poor Paul doesn't pay more in taxes in total and he doesn't pay a higher rate either. Actually, if he's working and he's that poor, he's probably getting more money back than he's putting in through tax credits including the EITC. He simply pays the same sales tax, which under Brownback is a paltry .2% more than it was in 2011. And please show me a study that says poor people drive farther than rich people on average.
 
No, Poor Paul doesn't pay more in taxes in total and he doesn't pay a higher rate either. Actually, if he's working and he's that poor, he's probably getting more money back than he's putting in through tax credits including the EITC. He simply pays the same sales tax, which under Brownback is a paltry .2% more than it was in 2011. And please show me a study that says poor people drive farther than rich people on average.

And here is where you are missing the most important variable, CONSUMPTION!

In a sales tax you are taxed for what you BUY. The more you buy the MORE YOU ARE TAXED. So yes, you can be fairly poor and actually end up paying MORE in taxes than a wealthier person who does not need to buy as much. That is why the tax is REGRESSIVE!

How can you not understand this?
 
$800 million per year, do you have a link to that? The total revenue (before refunds) is as follows:
First, look at the figures AFTER refunds (p 20)

2011 = $5.5 billion
2012 = $6 billion
2013 = $6.75 billion
2014 = $5.5 billion
2015 = $5.526 billion
2016 = $5.58 billion

That's a $700 million drop in 2014, in a state that typically spent $6 billion per year. The shortfalls are significant.

Since the state slashes spending massively, I'd have to wade through dozens of articles to identify the initial shortfalls. But check the article I linked previously, that discusses the $800 million over 18 months figure (which is fairly typical -- hence the repeated annual crisis).


And you really think that a .2% raise in sales tax is going to strangle the poor people?
Lower and middle income Kansans are already paying far more as a share of their income in taxes than wealthy people:

tax-shift-graph.png

Those at the Top Would Get More Tax Breaks, Investments Would Suffer from Shift to Consumption Taxes - KY Policy


And you think the dramatic increase in sales tax revenue is due to a .2% increase?
I think you're using the wrong figures again.

From the full 2016 report, page 34: http://www.ksrevenue.org/pdf/ar16complete.pdf

2011 = $2,253,118,350 21.3%
2012 = $2,461,692,546 9.3%
2013 = $2,524,617,488 2.6%
2014 = $2,446,256,312 -3.1%
2015 = $2,484,952,755 1.6%
2016 = $2,658,933,510 7.0%

That doesn't seem completely out of line with changes to sales taxes, and national hikes in income. Though I could be wrong, as Kansas' per capita and employee incomes are flat (see Kansas GDP and Per-Capita GDP | Department of Numbers)


There also isn't any evidence that the state's growth is raging. GDP is fairly flat:

chart



And funny, he's projected to do this and that...who cares? Let's concentrate on what he has done.
What he has done is:

- Blow huge holes in tax revenues (he predicted the opposite)
- Cut education spending
- Raided the state's long term funds (not what he promised or predicted)
- Raided the state's highway funds (also not predicted)
- Proposed selling off a source of income, namely the tobacco settlement
etc etc

What he's done is make a total mess of Kansas' fiscal condition, with no end in sight.

Should we conclude that you are in favor of gutting education spending, highway funding and progressive taxes? That's the only way I can make sense of your position.
 
And here is where you are missing the most important variable, CONSUMPTION!

In a sales tax you are taxed for what you BUY. The more you buy the MORE YOU ARE TAXED. So yes, you can be fairly poor and actually end up paying MORE in taxes than a wealthier person who does not need to buy as much. That is why the tax is REGRESSIVE!

How can you not understand this?

And would you say poor people purchase more than rich people? :lol:
 
First, look at the figures AFTER refunds (p 20)

2011 = $5.5 billion
2012 = $6 billion
2013 = $6.75 billion
2014 = $5.5 billion
2015 = $5.526 billion
2016 = $5.58 billion

That's a $700 million drop in 2014, in a state that typically spent $6 billion per year. The shortfalls are significant.

Since the state slashes spending massively, I'd have to wade through dozens of articles to identify the initial shortfalls. But check the article I linked previously, that discusses the $800 million over 18 months figure (which is fairly typical -- hence the repeated annual crisis).



Lower and middle income Kansans are already paying far more as a share of their income in taxes than wealthy people:

tax-shift-graph.png

Those at the Top Would Get More Tax Breaks, Investments Would Suffer from Shift to Consumption Taxes - KY Policy



I think you're using the wrong figures again.

From the full 2016 report, page 34: http://www.ksrevenue.org/pdf/ar16complete.pdf

2011 = $2,253,118,350 21.3%
2012 = $2,461,692,546 9.3%
2013 = $2,524,617,488 2.6%
2014 = $2,446,256,312 -3.1%
2015 = $2,484,952,755 1.6%
2016 = $2,658,933,510 7.0%

That doesn't seem completely out of line with changes to sales taxes, and national hikes in income. Though I could be wrong, as Kansas' per capita and employee incomes are flat (see Kansas GDP and Per-Capita GDP | Department of Numbers)


There also isn't any evidence that the state's growth is raging. GDP is fairly flat:

chart




What he has done is:

- Blow huge holes in tax revenues (he predicted the opposite)
- Cut education spending
- Raided the state's long term funds (not what he promised or predicted)
- Raided the state's highway funds (also not predicted)
- Proposed selling off a source of income, namely the tobacco settlement
etc etc

What he's done is make a total mess of Kansas' fiscal condition, with no end in sight.

Should we conclude that you are in favor of gutting education spending, highway funding and progressive taxes? That's the only way I can make sense of your position.

To your first point about the $700 million, that's one year, not the $800 million per year that you've suggested. Imo it makes sense that they would take a big hit at first after passing such a big tax cut. Revenue has been growing steadily since then.

And it looks like you have a graph of Kentucky up there instead of Kansas.

To your next point accusing me of posting the wrong sales tax figures, I included Use Tax, why didn't you?

And you say he's blown huge holes in revenue, but I see one bad year for revenue, with the $700 million missing and it's gotten steadily better since then.

Also, how and where did they cut education? According to this link, Kansas ranks #2 in the country in the percentage of their budget (50.7% compared to a national average of 35.2%) that they devote to K-12 education.
 
The nation will soon surpass Kansas on the numbers. Kansas cannot keep up with the job growth rate.

Please tell me, why would a state with such low unemployment have the nation's most unpopular governor?

Who cares whether or not you like Brownback, he's effective. He gave a huge tax cut and they have low unemployment.

And keep the projections, they're meaningless. Argue on what Brownback's done so far.
 
Most Dangerous Cities In The United States - WorldAtlas.com
Houston is 20th in violent crimes per 100,000 people.

And it's wise for you to seek lower taxes but moronic for a governor to seek lower taxes for it's residents. You don't seem to believe in paying your "fair share" as many leftists put it, but the rest of Kansas is naturally paying their fair share now through the sales tax.

I am a pragmatist. I seek to keep my taxes as low as I can just like everyone else does. Similarly when I go out and buy a new vehicle, I try to get the best price I can just like everyone else. (this is also why it is foolish to have exorbitantly high corporate taxes as it only encourages corporations to incorporate in places with much lower corporate taxes) A government in contrast must raise enough revenue through taxes and fees to meet its fiscal obligations. In the case of Kansas, those fiscal obligations are primarily public schools, infrastructure, policing and so on. Thus if the state already has competitive tax rates, its rather foolish to cut those taxes to such an extent that it can no longer meet its fiscal obligations. This is particularly true with a state like Kansas were many of its residents live very close to the Missouri line and thus will pay nothing to Kansas in income taxes if Kansas drops its tax rates lower than Missouri's (since a resident will often work on the Missouri side), and since its very easy to make big purchases on the Missouri side if sales taxes get to high on the Kansas side.

One would think that at some point you would agree a state's taxes can be too low for them to meet their fiscal obligations. Kansas had fairly low tax rates even before Brownback's cuts. So he started with competitive tax rates that were low, but sufficient enough to meet the state's fiscal obligations. Now, they are even lower, but no longer sufficient to meet the state's fiscal obligations. And I might add, Kansas is not a big spending state, it doesn't have big government programs, so there is little for it to cut.
 
Who cares whether or not you like Brownback, he's effective.

This has nothing to do with me. These are Brownback's approval ratings in his state. Why is this "effective" Republican governor in a very conservative state the MOST unpopular governor in the country?


He gave a huge tax cut and they have low unemployment.

And they also have some of the lowest job growth in the nation. It is all getting worse for a governor already under fire.


And keep the projections, they're meaningless.

Fair enough (although I wouldn't go as far as to say they're "meaningless"), but we do know the nation's unemployment rate is falling while Kansas' unemployment rate is rising.
 
And keep the projections, they're meaningless. Argue on what Brownback's done so far.

Brownback rammed ALEC legislation through a compliant legislature. He made specific promises as to what that legislation would achieve. The experiment is an abject failure. Kansas is in a hole Brownback and his enablers dug. The specifics are all over this thread.
 
Brownback rammed ALEC legislation through a compliant legislature. He made specific promises as to what that legislation would achieve. The experiment is an abject failure. Kansas is in a hole Brownback and his enablers dug. The specifics are all over this thread.

Kansas Sate & Local debt projection for 2017 per capita is $8,827 while the national average is $9,523 (source)... but it's nice to see you guys caring about government debt for once, even if it is for irrational and highly partisan reasons.
 
I am a pragmatist. I seek to keep my taxes as low as I can just like everyone else does. Similarly when I go out and buy a new vehicle, I try to get the best price I can just like everyone else. (this is also why it is foolish to have exorbitantly high corporate taxes as it only encourages corporations to incorporate in places with much lower corporate taxes) A government in contrast must raise enough revenue through taxes and fees to meet its fiscal obligations. In the case of Kansas, those fiscal obligations are primarily public schools, infrastructure, policing and so on. Thus if the state already has competitive tax rates, its rather foolish to cut those taxes to such an extent that it can no longer meet its fiscal obligations. This is particularly true with a state like Kansas were many of its residents live very close to the Missouri line and thus will pay nothing to Kansas in income taxes if Kansas drops its tax rates lower than Missouri's (since a resident will often work on the Missouri side), and since its very easy to make big purchases on the Missouri side if sales taxes get to high on the Kansas side.

One would think that at some point you would agree a state's taxes can be too low for them to meet their fiscal obligations. Kansas had fairly low tax rates even before Brownback's cuts. So he started with competitive tax rates that were low, but sufficient enough to meet the state's fiscal obligations. Now, they are even lower, but no longer sufficient to meet the state's fiscal obligations. And I might add, Kansas is not a big spending state, it doesn't have big government programs, so there is little for it to cut.

Kansas has taken in much more in sales/use tax since the tax cuts took place, so much so that it appears to be slowly taking the place of the missing income tax. Revenue isn't getting worse, it's getting better. I get your point that you need revenue to run a government and that they've fallen short, but I see things trending in the right direction. If there's more sales, then there are more opportunities for businesses to grow. To be fair though, I own a small business and even though I like the low tax rates we have here in Michigan, my determination to go into business had nothing to do with how much state tax I was going to pay, so I don't know how much that means to other business or potential business owners in Kansas. But we'll probably have to agree to disagree, because to your point, they have taken a large hit in revenue but to my point I see it getting better and not worse.
 
Brownback rammed ALEC legislation through a compliant legislature. He made specific promises as to what that legislation would achieve. The experiment is an abject failure. Kansas is in a hole Brownback and his enablers dug. The specifics are all over this thread.

Well, good thing folks in Kansas are paying such low income taxes and have such low unemployment then!
 
This has nothing to do with me. These are Brownback's approval ratings in his state. Why is this "effective" Republican governor in a very conservative state the MOST unpopular governor in the country?




And they also have some of the lowest job growth in the nation. It is all getting worse for a governor already under fire.




Fair enough (although I wouldn't go as far as to say they're "meaningless"), but we do know the nation's unemployment rate is falling while Kansas' unemployment rate is rising.

Their unemployment rate dropped to 4.2% in December, so it's not climbing. Incredible how anyone could complain about a 4.2% unemployment rate.
 
Their unemployment rate dropped to 4.2% in December, so it's not climbing.
And it was 3.7% in May. The rate is trending up. 0.1% dip in one month doesn't tell the whole story.


Incredible how anyone could complain about a 4.2% unemployment rate.

No one is complaining about 4.2% unemployment rate.
 
To your first point about the $700 million, that's one year, not the $800 million per year that you've suggested. Imo it makes sense that they would take a big hit at first after passing such a big tax cut. Revenue has been growing steadily since then.
Read it again. Revenues fell in 2014, and are stagnant for 2015 and 2016. They've had to slash spending madly every year.


And it looks like you have a graph of Kentucky up there instead of Kansas.
My bad :doh

But, I wasn't wrong.

Kansas sales taxes are highly regressive:

Kansas-sales-tax-effects-by-income-quintile.png



2015 figures for who pays Kansas taxes (Kansas | The Institute on Taxation and Economic Policy (ITEP))

KansasFed.jpg



The tax cuts were also regressive

3-27-14sfp-f3.png



Kansas isn't the most regressive state for taxation, but it's in the bottom 10.


To your next point accusing me of posting the wrong sales tax figures, I included Use Tax, why didn't you?
I did use combined use and sales tax. Page 34. The numbers I typed were from the 3rd column, which is sales + use taxes combined.


And you say he's blown huge holes in revenue, but I see one bad year for revenue, with the $700 million missing and it's gotten steadily better since then.
No, it's stayed around $5.5 billion for the past 3 years. And here's some links for your edification.

Budget deficit looms for Sam Brownback, Kansas Legislature as 2015 session begins | The Wichita Eagle
https://www.theatlantic.com/politics/archive/2015/06/where-republicans-went-wrong-in-kansas/396398/
Kansas tax cuts on trial amid huge budget deficit - Jan. 11, 2015
Kansas faces $346 budget deficit in current fiscal year | The Kansas City Star
http://www.kansascity.com/news/politics-government/article118289773.html


Also, how and where did they cut education?
http://www.kansascity.com/news/state/kansas/article81300732.html
http://www.kansascity.com/news/politics-government/article63347152.html
http://www.kansascity.com/news/politics-government/article9376751.html
http://www2.ljworld.com/news/2014/oct/18/kansas-education-cuts-among-largest-nation/


According to this link, Kansas ranks #2 in the country in the percentage of their budget (50.7% compared to a national average of 35.2%) that they devote to K-12 education.
According to what link?

Spending per student:
2014 = $9,972
2013 = $9,987
2012 = $10,051
2011 = $9,996
2010 = $10,547
http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html

Assuming you are correct, Kansas spends more of its budget on education, because they spend less on everything else. Kansas is already very lean in its state spending, which is why they are cutting education in order to make ends meet.

Read up on it. It's a freaking disaster, built on a poor interpretation of comparative data about states and wishful thinking about tax cuts.
 
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