They’re back home now, the members of the Legislature, and it’s going to be an interesting summer listening to lawmakers as they describe what they did this year and try to convince us to re-elect them to another term.
The big issue, of course, is that gigantic income tax cut that was passed and signed into law dropping tax rates for all Kansans—and eliminating most income taxes for many small businesses in the state.
Nobody doesn’t want a tax cut, but it will be interesting to see whether there is any mention of the effect of that cut on state revenues…which is basically the money that the state spends on things like schools, roads, salaries, welfare and Medicaid for the poor, maintenance of parks and such—and even restaurant and grocery store inspections.
Yes, look for state government to shrink, and the tax money the state spends on the things it does for us that we really don’t think about much to shrink, too.
Not sure that there’s going to be much talk about that, because tax cuts are the sweet spot for campaigning for re-election.
And, yes, the tax cuts sound good. But the concept that walks hand-in-hand with those tax cuts is that lower taxes on businesses means that businesses will prosper and hire more workers so there will be even more revenue for the state—from income and sales taxes—to spend on those things we expect the state to provide for us.
That’ll be the interesting part of the conversation because businesses aren’t social service agencies; they exist to make a profit for their owners.
If you owned a small business and saw your tax bill drop substantially, would you hire another worker? And not just that son-in-law you’d have to hire anyway to keep the family happy?
That hiring is the key to making the tax cut work, and so far, we haven’t seen many hands rise when we ask that question.
Because, practically, no business should ever hire an employee who can’t make the business more money. Businesses that intend to hire more workers just because they pay less taxes are, well, not quite businesses, are they?
Now, this tax cut could work if businesses find more customers with more money to spend (because their customers’ taxes are lower) and need more employees to meet that consumer demand and yield more profits for the business owner.
It’s that part of the equation that isn’t proven yet. If it works, this business tax cut turns out to be an excellent idea, and whoever thought it up probably can walk on water.
But, if those business owners decide, say, to take a cruise or trade up to a Buick, rather than hire more workers…then it doesn’t work.
That’s the part of the equation that we’re interested in seeing how candidates for the Legislature deal with. Because if those tax cuts cause state revenues to shrink to a level where lawmakers can’t provide us that aid to schools, or money for smooth highways, or meat inspection, well, about mid-term, we’re not going to be happy, are we?
It may be an interesting campaign…watching candidates figure out how to convince us that the second part of that tax cut will work out in a way we’ll like.
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.
Tax cuts to make for interesting campaign