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I just read an article in the Wichita Eagle's edition by Bernie Koch about the pie in the sky tax law they just passed. He attended a Wichita Independent Business Association meeting recently where, “Wichita attorney Jerry Capps explained a serious technical problem in the new Kansas income-tax cut bill." Koch says there was shock among the attendees as Capp, the VP of a prominent Accounting firm and a lawyer explained that the law, as written, is incomplete at best. I think the law was likely written by the Korporate Raiders of Koch Industries Inc and their flunkies over at ALEC who are just as inept and feckless as the supposed legislators who proposed and then passed this morass. More below the orange squiggly.

Assigning blame for this starts with Slammin' Sammy Brownback, his wife, Mary --the former Mary Stauffer, heiress to the Topeka newspaper fortune and the Kansas Koch brothers funded Americans for Prosperity. The rich have no desire to pay their fair share to fund our state. The earnings from their companies and endeavors that were once a major source to fund our state education and social services are no longer happening. Bernie Koch’s article goes on to say that, “[the] legislation was really “unfinished” and had a lot of problems, including a lack of definition of tax basis.”
Further, Capps said, “The bill does not account for full or partial ownership changes after Jan. 1, 2013. That’s because it was passed in such haste. Businesses trying to plan for 2013 taxes have no instructions.”
Capps told the Wichita Independent Business Association that it will take legislative action to fix. In the meantime, many businesses have no idea how to plan for changes. There is speculation that the law could prevent new businesses from coming to Kansas, contrary to its intent.
Problems abound according to Capps:
•     LLC’s, or limited liability companies are not mentioned in the bill, yet it is generally assumed they get the tax cuts.
•    The bill appears to eliminate deductions for mortgage interest and charitable contributions in one section, but retains them in another.
•    Part of the bill refers to another part of the bill that does not exist.
The Kansas Department of Revenue is trying to correct these problems by writing rules and regulations that interpret the intent of the Legislature. However, the tax-basis problem will take legislation. Those are some of the Main Street headaches. Wall Street technicians are also worried.

But wait, there’s more news from this fiasco, Moody’s, the bond credit rating organization, had this Kansas forecast on June 13: “No improvement in economic growth as a result of the tax cuts…although improved economic growth is the legislation’s policy goal... Unless it is able to implement corresponding spending cuts or achieve faster economic growth than currently anticipated, the state forecast shows out-year operating budget deficits and depletion of fund balances, which would cause downward credit pressure.”

In a July 5 report on the economic health of Kansas, Moody’s said the biggest obstacle to the state’s economic recovery is “a shrinking public sector.” In addition, the report said: “Prospects of additional public-sector retrenchment will remain the biggest threat to the recovery. Federal government payrolls were hit especially hard last year, with state and local employment declines not too far behind.”  Bernie Koch says in wrapping up his article, "Tax and spending cuts that are strategically targeted can be helpful to economic growth if they are carefully crafted."

This legislation was not the business of a skilled budget surgeon but rather the hammer blows meant to deal a death blow. Since we know how effective the Kansas Dept. of Revenue has been with the new DMV software rollout, we are assured of the state being broke before Slammin’ Sammy’s watch ends. We get what we vote for people, Voting for someone who believes government is the problem is a self realizing prophecy.  

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