We’ve all now seen Gov. Sam Brownback’s plan to lower individual income tax rates and—as Brownback likes to put it—let Kansans keep more of their hard-earned money in their pockets instead of sending it to Topeka.
Sounds pretty good for most Kansans, and the governor accomplishes that tax reduction by eliminating dozens of deductions and credits that more than 1 million Kansans hear about and read about but don’t get to use because they file the short form, taking the standard deduction and calling it good.
Understandably, short-form filers are more than a little envious of those credits and deductions, and because they don’t apply to them, they’re a little suspicious of them. Paid off your house? Then the mortgage interest deduction doesn’t apply. Don’t happen to own a hog farm? Then you can’t claim the swine facility improvement tax credit. (Nobody in Kansas claimed that credit last year, but it’s there in the statute books just in case.)
So, Brownback just eliminates those deductions and credits which reduce the tax bill of those who use them, and takes the savings and lowers everyone’s rates. Sounds like a good trade, maybe.
If the rate-lowering covers the loss of those deductions and credits, you are a winner and have that extra money to pocket. If the rate-lowering doesn’t cover the loss of credits and deductions, is that a tax cut?
OK, now here’s how this plays out for us Statehouse insiders who sniff around for the politics behind everything that every governor has ever proposed.
About 1.45 million individual income tax returns are filed with the state every year, and less than 30 percent of those returns are “long forms” on which taxpayers claim credits and deductions that Brownback proposes to eliminate. That leaves about 1million tax filers who won’t notice elimination of those deductions and credits and will just see their tax rates drop.
Now, that million or so Kansans are fans of the cut, and logically won’t like—or vote for—legislators who don’t vote to get them that tax cut. Simple. The technical term is “enlightened self-interest.” Nothing wrong with that.
But it gets more interesting. Let’s just guess that, say, a moderate Republican in the Senate doesn’t like the quiet little provision also in the Brownback plan that limits state spending increases to just 2 percent a year when schools and Medicaid and pensions and other expenses are rising more than 2 percent, meaning cuts in programs that they and their constituents care about.
Do you imagine that Kansans who get a tax cut—and who aren’t told about the spending limit, or just like choking off revenues to state government—are going to vote to reelect those incumbent moderate Republican senators who oppose the tax cuts?
This means if it works out for Brownback, next session he may have a Senate that doesn’t have as many moderates to fight him over much of whatever he wants to do next year.
That’s the other math in the tax cut equation.
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this statewide political news service, visit the website at www.hawvernews.com.
Governor wants taxpayers to keep more of their money