We’re just a week away from the Governor’s Council on Tax Reform meeting in the Statehouse to consider ways to cut taxes. As lofty and nonpartisan as that title is, the real name could be “What Tax Cuts Will Get Us Elected or Re-elected.”
Yes, that’s what tax reform is. Finding the tax cuts that will get votes for you or your party and the way to do that is cutting the right taxes for the right voters and then telling them that you’ve done it in your upcoming campaign.
That’s why the “reforms” proposed by that council essentially turn into decisions on who gets what in the way of tax cuts. Corporations? Individuals? Grocery buyers? Property taxpayers?
That’s the real issue, though “reform” is a word that most of us like and which sounds noble. “Reform” can, in the Statehouse, be defined as finding what tax cuts will elect the most Republicans or Democrats in next year’s election when every Kansas House and Senate seat is up for election.
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Now, it’s a little more complicated for Gov. Laura Kelly, who by executive order established that council. She, of course, has a government to run and that takes money and that means tax cuts…up to a point…but she needs to make sure the council leaves enough money in the State General Fund to keep the state, and its important programs, afloat. Nobody wants to be the governor of a state with no cash on hand.
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So, what do we look for?
Most obvious is a recommendation from the council to the governor to reduce the 6.5% sales tax on groceries. But, remember the state’s sales tax is just the baseline. Local units of government put their own local sales taxes on those groceries, which is the reason that most food (and everything else) carries a sales tax of about 9%. But that council recommending cuts in local sales taxes isn’t a starter in the Legislature. So, the council probably ought to look at just state sales tax on groceries.
And then comes that word “reform” which may have some considering whether cutting the sales tax on bologna that poor people buy might be a little more noble than cutting the sales tax on steak and salmon that higher-income Kansans buy. Is that a “reform?”
Oh, and don’t forget that while cutting income taxes, possibly shuffling the break point between different rates, is also probably “reform” but it doesn’t show up before the election. A cut in rates on individual income taxes may show up as a few bucks a week in lower withholding from your paycheck but it’s not something that voters will see every time they drop into the grocery store for bread or soap or shampoo.
The sales tax? Those cuts could show up as early as…a couple weeks before the Aug. 4, 2020, primary election, and surely before the Nov. 3 general election.
That’s just one of those issues that can sound like “reform.”
Corporate income tax cuts? They can be sold to voters as ways to shore up employment and keep Kansas productive, but it’s not likely those corporate savings will trickle down very quickly to higher wages or more jobs and they can be portrayed in the elections as cuts for the wealthy business owners and executives. Nice crowd, probably good campaign contributors, but not a whole lot of votes in the executive offices…
Property tax cuts? That gets extremely complicated, and usually winds up with city, county and other local government coming to Topeka to battle over “separation of powers.”