What is the matter with Kansas: Cut taxes for rich, raise them for poor

[El Minion]

Kansas considers tax cuts for most residents -- except poorest (http://www.latimes.com/news/nation/nationnow/la-na-nn-kansas-poor-tax-20120223,0,2777899.story)

http://www.latimes.com/media/photo/2012-02/87948740-23134941.jpeg
Kansas is considering a measure that would cut taxes for everyone but poor people. (Stock image)

By Matt Pearce February 23, 2012, 2:14 p.m.

Reporting from Kasas City, Mo.—

Kansas is considering raising taxes on its poor and cutting them for everybody else.

State Republicans (http://www.latimes.com/topic/politics/parties-movements/republican-party-ORGOV0000004.topic) have been campaigning to overhaul the tax code in Kansas to spur growth. The idea is that, by eliminating income taxes for residents and small businesses, lowering the sales tax and ditching a host of tax credits, Kansans will have more money and thus stimulate the economy.

But for the state’s poorest, the devil is in the details.

A Kansas House tax committee passed a bill in which anyone making less than $25,000 a year — roughly half a million of the state’s 2.9 million residents — will pay an average of $72 more in taxes, while those making more than $250,000 — about 21,000 people — will see a $1,500 cut, according to Kansas Department of Revenue estimates cited (http://www.kansascity.com/2012/02/22/3446052/amended-kansas-tax-plan-increases.html) by the Kansas City Star.

The hike would come from the elimination of tax credits typically benefitting the poor.

The Kansas House bill, still under review by legislative leadership, is actually a less-ambitious version (http://www.kansascity.com/2012/01/17/3376262/brownback-tax-plan-hits-poor-hardest.html) than one initially proposed by Republican Gov. Sam Brownback (http://www.latimes.com/topic/politics/government/sam-brownback-PEPLT000754.topic) in which the poorest would pay $156 more in income taxes while those making $250,000 a year would pay $5,200 less.

The state’s liberals, probably as you’d expect, have been outraged.

“It’s been Robin Hood (http://www.latimes.com/topic/sports/robin-hood-PESPT003330.topic) in reverse,” Senate Minority Leader Anthony Hensley (http://www.latimes.com/topic/politics/anthony-hensley-PEPLT002863.topic), a Topeka Democrat, told the (http://www.kansascity.com/2012/01/17/3376262/brownback-tax-plan-hits-poor-hardest.html) Kansas City Star in mid-January. “What we are doing is stealing from the poor to give to the rich.”

The state’s conservatives, probably also as you’d expect, didn’t quite see it that way.

"Our goal is for our economy to look more like Texas, and a lot less like California," Brownback said (http://online.wsj.com/article/SB10001424052970203889904577200872159113492.html) in a Wall Street Journal editorial praising the anti-income-tax plan.

How much like Texas? Kansas’ unemployment rate is among the lowest in the nation, with 6.3% unemployed, according to (http://www.bls.gov/web/laus/laumstrk.htm) the U.S. Bureau of Labor Statistics; Texas’ is 7.8%. The USDA (http://www.latimes.com/topic/science-technology/agricultural-research-technology/u.s.-department-of-agriculture-ORGOV0000241.topic)’s Economic Research Service estimates (http://www.ers.usda.gov/data/povertyrates/) Kansas’ poverty rate to be 13.5%, while Texas’ is 17.9%.

Reaganomics mastermind Art Laffer is getting paid $75,000 to consult on the state’s overhaul, and he ran into some flak in January when he arrived to give testimony on the new plan, according to (http://www.mcclatchydc.com/2012/01/20/136425/reaganomics-guru-laffer-praises.html) the Kansas City Star.

Kansas NOW, which recently sounded the alarm when Topeka symbolically decriminalized domestic abuse (http://latimesblogs.latimes.com/nationnow/2011/10/domestic-violence-topeka-kansas.html) because of a municipal funding shortfall, challenged Laffer on the elimination of an earned-income tax credit used by single mothers, according to the Star, to which Laffer responded that the best form of welfare is a high-paying job.

[El Minion]

Blue state residents get ready for more transfer of wealth to subsidize Kansas tax breaks to the rich. (http://reason.com/archives/2011/04/29/the-truth-about-taxes-and-the/1).

Myth 2: Blue states are big government states and red states are small government states.

Fact 2: Blue states are net payers, meaning residents pay more in income tax than they get back from the federal government, while red states are net recipients. Only one red state pays more into the system than it gets.

Only 10 blue states are net recipients of federal subsidies, as opposed to 22 red states. Only one red state is a net payer of federal taxes, as opposed to 16 blue states. Another blue state pays in as much as it gets.

http://media.reason.com/mc/jtaylor/verorich2.jpg?h=332&w=450

This chart uses data from the Tax Foundation documenting the amount of federal spending in each state per dollar of federal taxes paid with states classified as red or blue according to their respective voting results in the 2008 presidential election. As you can see, red states receive more in benefits from the federal government than they put in; the opposite tends to be true for blue states. Only one red state receives less from the federal government than it pays in; compare this to the 17 blue states that receive less in benefits than they pay in federal taxes. Conversely, 21 red states are net recipients of federal funding, while only 11 blue states are.

The top 10 recipients of federal money are New Mexico, Mississippi, Alaska, Louisiana, West Virginia, North Dakota, Alabama, South Dakota, Kentucky, and Virginia. The top 10 payers are New Jersey, Nevada, Connecticut, New Hampshire, Minnesota, Illinois, Delaware, California, New York, and Colorado. Rhode Island breaks even.

With a few notable exceptions, the Northeast, the Upper Midwest, and the West Coast bankroll the South and Great Plains. That pattern also looks like a red and blue state map from any recent presidential election. While the differences between the red and blue states are often exaggerated, it remains an interesting proxy to some heartfelt differences between rural and urban states.

There is a very strong correlation, then, between a state voting for Republicans and receiving more in federal spending than its residents pay to the federal government in taxes (the rust belt and Texas being notable exceptions). In essence, blue state residents are subsidizing those in red states. Both red and blue states appear to be acting politically in opposition to their economic interests. Blue states are voting for candidates who are likely to continue the policies of red state subsidization while red states are voting for candidates who profess a desire to reduce federal spending (and presumably red state subsidization).

[That One Guy]

Michigan was doing something similar not too long ago. I think the point is there's plenty of poor people, why cater to them and keep them around? Recruit the more productive people and see the fate of your population improve.

[snowspot66]

Michigan was doing something similar not too long ago. I think the point is there's plenty of poor people, why cater to them and keep them around? Recruit the more productive people and see the fate of your population improve.

Yes, Michigan, definitely a state you should look to when you need a model of prosperity to reference.

[That One Guy]

Yes, Michigan, definitely a state you should look to when you need a model of prosperity to reference.

Exactly why they would be attempting such.

How it'll turn out, we haven't yet seen. Definitely a festering ground to try such an experiment, though.

I was merely saying it could parallel what they were trying.

[Rohirrim]

The red staters will do anything to avoid the fact that their ideology is a total failure. I'm sure Brownback and Laffer came up with this plan in the hopes that it would just drive some of the poor people in Kansas to leave the state, hopefully to some blue state.

[Pony Boy]

30309

[jhns]

How exactly would they tax the poor less? There is not a single poor person that I know who pays taxes. They pay in 6k and get 8k back... This isn't defending cuts for the rich, but poor people have no room to complain in this country.

[Pony Boy]

How exactly would they tax the poor less? There is not a single poor person that I know who pays taxes. They pay in 6k and get 8k back... This isn't defending cuts for the rich, but poor people have no room to complain in this country.

The working poor with the "earned income credit" can have a refund larger than their income tax withholding, which means they get more money back from the IRS than they have paid-in.

[cutthemdown]

The working poor with the "earned income credit" can have a refund larger than their income tax withholding, which means they get more money back from the IRS than they have paid-in.

Uh the non working poor won't be paying taxes right? No job = no income. So non working poor not really the issue, all they do is suck up services.

[Shananahan]

They pay in 6k and get 8k back...
I'd like to hear some more about this.

[Bob]

The red staters will do anything to avoid the fact that their ideology is a total failure. I'm sure Brownback and Laffer came up with this plan in the hopes that it would just drive some of the poor people in Kansas to leave the state, hopefully to some blue state.

I wonder who first proposed progressive tax rates?

[Bob]

I think it might be fair for the 48% to pay their fair share, hell, Id be ok with any share...

The "evil" rich pay more than they should already -- unless of course you are looking to redestribute their earned income -- and that may be one reason why Karl Marx advocated for a graduated income tax in the Communist Manefesto.

[El Minion]

I think it might be fair for the 48% to pay their fair share, hell, Id be ok with any share...

The "evil" rich pay more than they should already -- unless of course you are looking to redestribute their earned income -- and that may be one reason why Karl Marx advocated for a graduated income tax in the Communist Manefesto.

http://i224.photobucket.com/albums/dd6/bucsnbears/AhJeez.jpg

9 Things The Rich Don't Want You To Know About Taxes (http://www.wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxe s.html)

1. Poor Americans do pay taxes.

Gretchen Carlson, the Fox News host, said last year “47 percent of Americans don’t pay any taxes.” John McCain and Sarah Palin both said similar things during the 2008 campaign about the bottom half of Americans.

Ari Fleischer, the former Bush White House spokesman, once said “50 percent of the country gets benefits without paying for them.”

Actually, they pay lots of taxes—just not lots of federal income taxes.

&nbspata from the Tax Foundation show that in 2008, the average income for the bottom half of taxpayers was $15,300.

This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes.

But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax-free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.

http://www.wweek.com/portland/imgs/media.images/3907/lede_3723_%28population%29.jpg

Credits: WW CHART — SOURCE: MEDICARE TAX DATABASE; CENSUS

Etc. (http://www.wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxe s.html)

[Pony Boy]

I'd like to hear some more about this.

It's called "earned income credit"

http://www.irs.gov/individuals/article/0,,id=96466,00.html

A lot of low income tax payers get rather large refunds checks printed by the professional tax preparers usually within 24 hours of filing the return and most are considerably larger than the amount they had withheld.

[Fedaykin]

Repeat after me wingnuts:

"Income taxes are not the only tax levied. Incomes taxes aren't even the only federal tax levied"

You're all on notice, next time you show you don't yet understand this, it's detention for you all and you have to write the above 5,000 times on the black board.

[That One Guy]

Repeat after me wingnuts:

"Income taxes are not the only tax levied. Incomes taxes aren't even the only federal tax levied"

You're all on notice, next time you show you don't yet understand this, it's detention for you all and you have to write the above 5,000 times on the black board.

The Federal government dwarfs all other institutions. The fact that someone chips in a few bucks for gas tax or pays a few in state tax (I've never paid any state taxes, I don't know the rules on those) doesn't make it ok that they enjoy the magnificent benefits of the federal government without contributing. The taxes we all pay are a small blip in the grand scheme of benefits we enjoy.

[Fedaykin]

The Federal government dwarfs all other institutions. The fact that someone chips in a few bucks for gas tax or pays a few in state tax (I've never paid any state taxes, I don't know the rules on those) doesn't make it ok that they enjoy the magnificent benefits of the federal government without contributing. The taxes we all pay are a small blip in the grand scheme of benefits we enjoy.

You fail. As was already explained to the class, the federal income tax is not the only federal tax.

Nor is the it the tax that primarily funds pretty much anything but the military.

5,000 lines. You have until tomorrow.

[jhns]

You fail. As was already explained to the class, the federal income tax is not the only federal tax.

Nor is the it the tax that primarily funds pretty much anything but the military.

5,000 lines. You have until tomorrow.

Then teach the class. How much money does the average American spend on non income taxes? You add up everything else and I will tell you what I had to pay in income tax...

Now realize that I pay more of any tax you can come up with, than the poor pay. You should also try explaining how they are paying more in when they are getting welfare, foodstamps, and their kids payed for... All things I can't get.

The poor have no room to complain in this country.

[BroncoInferno]

The "evil" rich pay more than they should already.

Bull****. The taxes the rich pay are at HISTORICALLY LOW LEVELS. Yet, your right wing masters have brain washed you into believing they are some kind of oppressed class. Rich folks who make most of their money in capital gains (i.e. Warren Buffet, Mitt Romney) actually pay a significantly LOWER % of taexs on their income than do folks making many magnitudes less. And, yet you say: "The 'evil' rich pay more than they should already."

Goddamn, you are stupid.

[Rohirrim]

Right wing alternative reality.

[That One Guy]

You fail. As was already explained to the class, the federal income tax is not the only federal tax.

Nor is the it the tax that primarily funds pretty much anything but the military.

5,000 lines. You have until tomorrow.

The only other tax anyone regularly pays to the Fed. Gov. that I can think of is SS and that's, in essence, just to earn benefits later. It's hardly a tax in the sense of taking money to pay for the benefits of the federal government. Am I missing some that I'm not thinking of? I haven't looked at a pay stub in a long time so it's possible but the point will still remain, I'm sure, that in the grand scheme of things it will be inconsequential.

[L.A. BRONCOS FAN]

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