By Martin Hawver
Remember
all that talk about the $135 million or so that new federal income tax
cuts were going to dump into Kansas? The deal was with lower federal
income taxes, more of Kansans’ money would be subject to Kansas income
taxes.
Pay
less there (to the federal government) and you pay more to Kansas
because you have more money left over. Pretty simple, you pay it there
or here and the Statehouse crowd would rather you pay it here because of
the opportunities it offers them.
One
opportunity is for lawmakers to take that extra money that state income
taxes will now yield and think of cool things to do with the cash that
they didn’t have to do anything unattractive to get…like raise your
taxes.
Now,
that’s one way to go. Maybe use that additional money for schools,
roads, health care, law enforcement, welfare and everything else we
expect the state to provide? Well, so far, the answer is either yes…or
no.
Spending that money on things Kansas want is generally a politically popular thing to do. Sometimes.
But
there’s another politically popular thing to do with money the state
didn’t expect to get—give it back to voters in an election year by
cutting their state income taxes. That probably has a nice ring to it in
this year when the Kansas House stands for election, and even statewide
candidates can portray themselves as liking the move.
The
Senate, where just one (replacement) member stands for election to the
remaining two years of his term, appears to like the idea of what can
pass for smaller government--“give it back” is the slogan. Who doesn’t
like lower taxes? Not many who vote.
So,
the Senate GOP plan is shaping up as taking that extra money the state
will receive because of the new federal tax law and using it to pay for
Kansas income tax cuts. Imagine that, how it can be turned into tax
cuts, economy in government, all those political slogans we’ve been
hearing.
And
while most folks want K-12 public education funded adequately and the
poor and the ill cared for, well, there are few things as nice as a tax
cut.
But
how to do that tax cut in the most politically valuable manner is a
question. There are tax cuts and there are politically profitable tax
cuts, which is what the Senate Tax Committee proposed.
First,
decouple from the federal tax form, so you can itemize deductions for
Kansas income taxes even if you take the new, big federal standard
deduction. And then take the Kansas deductions which were slashed last
year—property taxes, mortgage interest, charitable contributions,
medical expenditures—and restore them to full strength again. That’s
what the committee did, oh, along with boosting Kansas’ own standard
deductions for taxpayers by 50 percent.
Sounds
good, doesn’t it? It clearly tilts the majority of that $135 million
toward homeowners with sizable mortgage interest payments to write off,
but who’s going to notice if more prosperous Kansans get the bulk of
that savings?
Well,
probably not many are going to notice, but the ones who do may be
mostly Republicans. At least those Republicans—if the tax plan
passes—will be reminded several times who voted for their tax break and
who didn’t.
Oh,
that court-ordered increase in school funding that the $135 million
would help pay? Or raises for state employees who haven’t gotten raises
in several years and are actually seeing their pay drop as inflation and
health insurance premiums rise? Those probably also would be good uses
for that money.
But what beats an election-year tax cut?
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver's Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com
