Martin Hawver
Guest columnist
This isn’t a drinking game, but can you find the similarity between the upcoming Kansas legislative session and “Dancing with the Stars”?
Stumped?
The similarity is that the prettier the dance team, the less you notice whether they are actually dancing well. It’s called misdirection, and it works in much of life. It’s a shift of attention. That’s why, for example, if the young lady assistant to a magician is pretty enough, we won’t notice that the magician actually put the rabbit in the hat when we weren’t looking at him.
OK, back to the Kansas Legislature. The key of misdirection that we are going to need to check is the use of the term “marginal tax rate.”
That “marginal tax rate” is very simply the rate of taxes paid on the last dollar of income. In Kansas, that marginal rate is 6.45 percent, which is a fairly stout rate of taxation. It’s a relatively big number, and that is the rate of taxation on every dollar of income above $60,000 paid by a married couple in Kansas.
That marginal rate? It’s the attractive couple dancing for us on TV, not…how do we say this in a politically correct manner…most Kansans.
Say that Kansas married couple have a taxable income of less than $30,000. They pay 3.5 percent of their taxable amount to Kansas. A married couple with $60,000 in taxable income pays 4.8 percent to the state.
Just look at the top marginal rate and you see where the class warfare breaks out between “regular” Kansans and those with substantially larger incomes. The higher-income families can point to their top marginal rate of 6.45 percent for taxable income over $60,000.
But, we’re wondering how many of those “regular” Kansans are going to be doing the long division to see whether they will get a bite of that lower marginal tax rate, or whether it’s going to the wealthier Kansans.
Now, there’s nothing wrong with wealth, we’ve heard…
But get ready for a legislative season of talk about marginal rates and not the average rate of taxation.
If Kansas lowers the marginal rates paid by wealthier Kansans, the conservative political mantra is that they will use that tax savings to invest in Kansas. The examples range from starting businesses to hiring more employees to, presumably, eating out more and creating more jobs for waiters and waitresses. No telling, but they’ll have more money to spend or invest if they want to.
Get out of the class warfare mode and everybody likes lower taxes. But how those income taxes are lowered—and the state appears to be on the way to having money to spend on lowering taxes—is the big issue.
This may turn out to be one of those legislative sessions where tax cuts are the centerpiece. It’s also likely to be one in which you might want to do a little long division and figure out whether those marginal rates mean much to what you eat on April 15.
It might be time to actually look at the dancers’ feet…
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