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Wed Apr 17, 2013, 10:47 PM

Tax Analysts from BOTH the Right & the Left Agree Brownback's Tax Plan is WORST in U.S.

Brownback's office actually brags about subsidizing sweatshops as two OPPOSITE tax experts agree that his tax plan is the worst in the country.


Governing magazine reported evaluations, made by 2 tax policy researchers: Joe Henchman from conservative Tax Foundation and Nick Johnson from Left-ish Center on Budget and Policy Priorities. Both said Brownback's tax plan encourages tax avoidance and probably won't have enough positive net effect upon the Kansas Economy.

Brownback's office responded by cheerleading for the fact that Kansas beat out one of the most poorly educated states in the union, Texas, for some Right-to-Work, apparel, sweatshop jobs that will be incapable of making up for 0 corporate income taxes in the state, even if they manage to add private prison garb to their school, band, sports, and cheerleader uniforms repertoire.

Both experts, Right and Left, strongly criticized the lopsided economic benefits of exclusive tax support for S corp, sole proprietorship, LLCs (this poster's nomination for the state's SUBSIDY sugar-tit thrown to Republican organized, prosperity "Gospel", evangelical-end-timer Dominionist coalitions, but then what should anyone have expected from SUBSIDY-Sam Brownback, who, it does not appear, has ever made a dime that wasn't WELFARE taken on the back of Kansas tax-paying individuals):

Those businesses are called “pass-through” entities because the business income is not taxed and passes through to the owners, who then pay the taxes on it as individual income.

Since Brownback’s plan was enacted, the owners of pass-through entities don’t pay any state income tax on their business income, either at the business or personal levels.

“That’s an incentive to game the tax system without doing anything productive for the economy,” Henchman said in the Governing interview. “They think things like the pass-through exemption will encourage small business, and to be fair, it might. But they are doing it in a way that violates the tax principle of neutrality.”

Neutrality is a widely accepted principle that tax systems should be structured so that business decisions are made on economic merits rather than for tax reasons. Henchman laid most of the blame on the Legislature for not broadening the tax base while cutting rates, which Brownback originally proposed.

Though, with discretionary income in the Kansas economy oppressed by workers having to deal with increasing fuel and food costs AND having to make up for the corporate free-ride, or lose community services, Brownback's lackey, Sherriene Jones-Sontag, responded to cutting double-edged economic critiques, from multiple directions, by saying the S-corps now have more money to hire workers and, in doing so, she demonstrated that she has no understanding that businesses do not hire workers for demand that is not there. The only explanation I can come up with for that level of ignorance is that it is expected that the fore-mentioned economic relationships amongst religious communities will provide the demand that is needed to make up, not only severe budget shortfalls, but also to create and sustain growth.

Nick Johnson is quoted in the Governing article as saying that Subsidy-Sam's tax plan “fails almost every test of good tax policy,” which includes sustainability and fairness, because vertical economic flow helps only high-incomes, harms lower incomes, and doesn't do anything for middle incomes. Republicans' exemption of pass-through entities, such as S-corps, results in inequities and tax avoidance, which builds problems with Kansas' already nearly unsustainable budget as costs balloon.

Both tax analysts thought the plan would fail to do much to jump-start economic growth and job creation. Johnson in particular was concerned that whatever small temporary benefit the plan does trigger will be heavily outweighed by the fact that it will cost so much in revenues that it will be impossible for Kansas to make other investments in itself that maintain a strong economy, like education and infrastructure.

Though they agreed on an example of the worst kind of tax plan, Kansas, the experts split on the states with the best tax reform plans. Henchman, the conservative, picked Rhode Island, for eliminating itemized deductions and tax credits and increasing the standard deduction for most individual income earners. Johnson cited Massachusetts, because the governor, Deval Patrick, is proposing an increase in income tax rates and a reduction of sales tax.

Isn't it interesting that two such WIDELY DISPARATE formulations of what is the best state tax strategy BOTH agree about what is the worst: Kansas.

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Reply Tax Analysts from BOTH the Right & the Left Agree Brownback's Tax Plan is WORST in U.S. (Original post)
patrice Apr 2013 OP
RKP5637 Apr 2013 #1
patrice Apr 2013 #2

Response to patrice (Original post)

Fri Apr 26, 2013, 06:13 AM

1. Kansas wants to lead the nation by being #1 at the bottom! n/t

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Response to RKP5637 (Reply #1)

Fri Apr 26, 2013, 12:45 PM

2. "Best" of the Worst & that includes some pretty bad U.S. places.

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