Friday, July 25, 2014

HAWVER: Tax cuts’ real effects not yet clear

By MARTIN HAWVER, At the Rail | 4/1/2013

Every week this session, House and Senate Democratic leaders have lamented last year’s shockingly large tax cut bill that produced maybe 190,000 Kansans with apparently no need to write an income tax check to the state any more.

Now, it might just work out that if Kansas does away with its income tax for everyone else, people will move here and spend money on cars and clothes and food and such and the sales tax will rise so that the state’s treasury will grow and Kansans can be taken care of.

Every week this session, House and Senate Democratic leaders have lamented last year’s shockingly large tax cut bill that produced maybe 190,000 Kansans with apparently no need to write an income tax check to the state any more.

Now, it might just work out that if Kansas does away with its income tax for everyone else, people will move here and spend money on cars and clothes and food and such and the sales tax will rise so that the state’s treasury will grow and Kansans can be taken care of.

Or, maybe not.

But Gov. Sam Brownback makes the point that it will take a year or so for this income tax-elimination drive to spur the rest of the economy so the state can support education and health care and public safety — the stuff we expect the state to do.

While the state’s leading Democrats make the point that it hasn’t happened yet, and distribute charts showing that the state budget will be a wreck in three, maybe four, and for sure by five years, they are having a problem getting people excited now.

And, because government moves relatively slowly and, like a child, always believes there are more cookies in the cupboard, Democrats have had a difficult time getting people worried or upset about further tax cuts the governor has in mind. Practically, Kansans are busy, and most of us don’t think about broad economic policies until we learn that our next vacation may not include the thrill of crossing a county line.

Democrats so far haven’t come up with a stunning forecast or iconic figure to get most Kansans to care about the tax/budget scrap coming up. They need a publicity program.

Or maybe a Warren Buffett, who wails that his secretary pays a higher percentage of her income in taxes than he does. Or perhaps some leading Republican they can focus on who pays a disappointingly low Kansas income tax that upsets not only the poor, but maybe the upper-middle class, too.

But Democrats are having a tough time selling the general public that last year’s tax bill has caused many problems. Now ... next year ... maybe. And the year after — that would be the year after the House and the governor stand for re-election — it’s likely to mean some reduction in state services that Kansans will notice.

(Or, there is the chance that Brownback is right, and everything is good, tax money rolls in, people are taken care of, and schools are adequately funded and all the rest.)

But the real key is that most Kansans aren’t looking that far into the future and so far, the real effects haven’t shown up.

Now, maybe if the state has to rein in spending, and local units of government have to raise property taxes and let their streets crack and crumble and schools wind up putting 30 kids in a classroom, the public will notice.

But that takes time and budget cycles for the state and for local units of government. So, we’re guessing, the Democrats’ lamentations continue.

Martin Hawver is publisher of Hawver’s Capitol Report. Visit his website at www.hawvernews.com

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