Stop a Dangerous New Tax Plan
House Tax Committee moves a bill for political gain
The House Tax Committee did it today. They worked like the dickens to put together and approve a bill that is long on politics and short on policy – at least on policy that will benefit Kansas families.
The Committee took up Senate Bill 22 – the tax give-away to multi-national corporations with just a smidge of benefit for a few individual taxpayers – and amended it for “gotchas” and campaign postcards before sending it out of committee and on to the full House.
Senate Bill 22 came to the House courtesy of Senate President Susan Wagle (R-Wichita) who grew frustrated with the actions of Senate Tax Committee chair Caryn Tyson (R-Parker) and so created her own tax committee for the sole purpose of sending this bill out at the request of the Kansas Chamber of Commerce and a group of multi-national corporations. The bill passed the full Senate on a vote of 26 to 14.
Now, let’s be clear; some of tax issues are worthy of discussion. Our food sales tax is too high, internet sales should be taxed just like our brick-and-mortar hometown stores are taxed, we need to encourage businesses to re-invest in Kansas jobs and workers. But the sad truth is that after 8 years of the Brownback tax experiment that left Kansas on verge of collapse, we need to be deliberate and careful to get ourselves out of the Brownback hole. It does us no good to fill in the hole but let someone stay down there continuing to dig!
The 2017 Legislature put a lot of fill back in the hole by repealing much of the Brownback experiment but we are still not fully restored. Let’s not start digging again!
So the House Tax Committee, much to our delight, appeared to be acting more carefully, pragmatically, and, dare we say, rationally until today when they met to get the bill out.
But before sending it out of committee, they amended it to do three things:
- They added in the contents of HB 2261, lowering the food sales tax from 6.5% to 5.5% on a motion by Rep. Les Mason (R-McPherson),
- They added in the contents of HB 2352, requiring online vendors to collect and remit sales tax once their sales have hit $100,000 in Kansas but taking out of the bill a tax on digital goods (Netflix, Hulu, iTunes, Kindle books, etc.) on a motion by Rep. Les Mason (R-McPherson),
- They amended it to repeal a statute requiring a line on the Kansas income tax form for self-reporting of internet purchases on which you didn’t pay sales tax on a motion by Rep. Les Mason (R-McPherson).
Mason’s amendments increase the fiscal note meaning there will be even less money for schools, roads, prisons, social services, foster care, and just about everything else that makes life better for ordinary folk.
The original bill had an adjusted fiscal note of -$187 million to the state. The amendments mean the state will lose another $60 million in food sales tax which will be partially offset by the internet sales tax collections. That was expected to be about $41 million but that can now be reduced by about $8 million with the elimination of the sales tax on digital goods. Additionally, the Department of Revenue estimates a cost of about $800,000 to hire the staff to review income tax returns now reviewed by the IRS. So, in total, this bill will reduce the treasury by about $208 million.
So why do we classify this action as “political theater?”
Passage of this bill is fully intended to cripple Governor Kelly and give her opponents things to put on campaign postcards and endless fodder for political half-truths and lies.
If Kelly signs the bill and it becomes law, it will cripple her ability to fund a budget that takes care of any of the horrible damage wrought on Kansas by conservative Republicans and Sam Brownback. Kelly has said her priorities are funding schools, repairing our foster care system, fixing the crisis in our prisons, and expanding Medicaid. If this bill becomes law, those priorities are not possible without a corresponding tax increase. Supporters of this bill will then attack Kelly for either failing to meet her campaign promises or raising taxes.
If Kelly vetoes the bill – and her veto would be very hard to override – then the supporters of this bill will immediately send postcards blasting her for not reducing the sales tax on food and that’s something she has in her long-term sights.
You see, it looks like lose/lose for the Governor. And the stage was set by Brownback’s people – the very people who willingly brought Kansas to the brink of collapse.
This bill needs to die. It is bad policy driven by partisan politics. It is harming working families by granting huge tax breaks to multi-national corporations and providing almost no benefit to individuals. Even Susan Wagle, on the Senate floor, noted that the itemization benefit for individuals will apply to only 18% of Kansas individual income tax filers and half of them are already rich enough to continue itemizing under the Trump tax catastrophe.
For 82% of Kansans, the only relief you’ll get is $1 off a $100 sack of groceries. And in return, Kansas roads will continue to suffer, needy Kansans will be denied services, and the Department for Children and Families will still not be able to ensure quality care for foster children.
We urge you to contact your Representatives NOW. The folks at “Rise Up Kansas” (KNEA, AFT, Kansas Organization of State Employees, Kansas Action for Children, the Kansas Center for Economic Growth) have created the action alert you see below. Please let your representative know that Kansas must once again be the best place to live, work, and raise a family. The Brownback tax experiment was a failure and Senate Bill 22 is a return to the failing policies of Sam Brownback. VOTE NO ON SENATE BILL 22!h
Stop a Dangerous New Tax Plan