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A Friday bill dump in Kansas. The 2013 Fair Tax Act (PDF link) for the state of Kansas has been submitted to the Committee on Taxation, and it looks like they're coming for our silverware. The highlights:

-Ends the sales tax and income taxes.

The bill claims that this will reduce the burden on employers, but our system (like other state income taxes I've paid) just piggybacks off of the federal income tax system and adds a negligible degree of complexity. I suppose this is a valid point if you assume that the most common tool used in Kansas payroll departments is an abacus, but we do have computers here. Perhaps it's a prereq bill for something they have in mind for later.

-Imposes a 6.3% "consumption" tax.

Okay, first off, if I'm paying a 6.3% consumption tax, and the purpose of the tax is to reduce the unnecessary burden on "job creators," I have to assume then that I'm being asked to save all my receipts for things the consumption tax would cover?

Answer: No, the bill directs businesses to collect the tax. The mechanism by which this is less complicated than adding an incredibly simple state income tax onto the federal tax that employers still have to do is a mystery.

-Changes what items are exempt from taxes

When people come here from other states, they're always surprised that we charge sales tax on groceries. The consumption tax would not change that.

It would not apply to the purchase of real estate, or airplanes, anything with an excise tax on it (except liquor and cigarettes), or machinery, or anything involved with making natural gas pipelines, or car sales to out-of-state purchasers, farms, or any equipment required by a business.

Kansas already has a long-term deficit problem due to the horrible budget passed last year. The deficit for 2013 was projected to be $327 million before a court ruled that our education funding was $400 million shy of what the state Constitution required.

So our state tax system, already one of the most regressive in the nation, is going into full-on punish the poor mode. It's apparent that the Kansas legislature is playing the part of a particularly sadistic SimCity mayor. One wonders what actions they're taking to loose Godzilla onto Johnson County.

Originally posted to Geiiga on Fri Feb 15, 2013 at 11:58 AM PST.

Also republished by Kansas & Missouri Kossacks.

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Comment Preferences

  •  Tips for inevitability? (23+ / 0-)

    Our state has two years to learn two things:

    How much of the damage that conservative legislators can do is directly mitigated by their bumbling incompetence?

    Is the state as conservative as it appears to be, or will our impending doom give us a much-needed leftward jolt?

    We're doing an anti-Westboro Baptist documentary. Help us here.

    by Geiiga on Fri Feb 15, 2013 at 11:58:13 AM PST

    •  WTFITMWK? (0+ / 0-)

      Never mind, as a Texan, I know all too well...

      "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans!!. . Willkommen im Vierten Reich! Sie haben keine Bedeutung mehr.

      by Bluefin on Sat Feb 16, 2013 at 02:19:54 AM PST

      [ Parent ]

  •  The difference between consumption tax (4+ / 0-)
    Recommended by:
    Geiiga, ColoTim, hnichols, Lujane

    and sales tax is what?  Just curious.

    Power to the Peaceful!

    by misterwade on Fri Feb 15, 2013 at 12:02:35 PM PST

    •  Sales tax is narrower. (4+ / 0-)
      Recommended by:
      madmsf, ColoTim, hnichols, skohayes

      It's specific to a sale of an item. When I buy a car, I go to the DMV, and I pay a sales tax, a registration fee, and a property tax. When I pay rent or my health insurance premium, that's not a sale and thus not subject to the sales tax.

      This would change it so that taxes are paid only by individuals (virtually every type of business transaction is exempted), basically any time they do anything that involves money.

      We're doing an anti-Westboro Baptist documentary. Help us here.

      by Geiiga on Fri Feb 15, 2013 at 12:11:12 PM PST

      [ Parent ]

    •  In the economics of taxation, the central idea (1+ / 0-)
      Recommended by:

      of consumption taxes is to tax imported goods and services at the same percentage rate of sales price, and to fully remove this tax burden when exporting (from the state or country) as the other country will impose its consumption taxes - avoiding taxation by both countries.  Technically, sales taxes are consumption taxes with some defects.

      Consumers don't see much of a difference between these taxes but businesses do. Jurisdictions with consumption taxes are more favorable for businesses that manufacture, or provide services  and hire people.  In a state with a sales tax, equipment and other items that are used but not resold, are taxed with no adjustment for this tax as these assets depreciate.

      Consumption taxes are more favorable to employment than sales taxes.  

      Generally speaking, governments that tax equipment purchases and annual property taxes on businesses that employ people, push businesses to locate elsewhere, increasing unemployment and decreasing wages.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Fri Feb 15, 2013 at 04:43:28 PM PST

      [ Parent ]

  •  Could be worse (2+ / 0-)
    Recommended by:
    hnichols, Lujane

    Some cities in Alabama charge a 10% sales tax -- and that includes all groceries.

  •  As far as I can tell, (4+ / 0-)
    Recommended by:
    Geiiga, hnichols, skohayes, Lujane

    The bill is essentially this:

    It includes a monthly stipend paid to each kansas resident to "counter act" the regressive nature.

    I suppose this could happen, Brownback certainly seems behind it.

    Look, I tried to be reasonable...

    by campionrules on Fri Feb 15, 2013 at 12:09:20 PM PST

    •  And if it passes (5+ / 0-)
      Recommended by:
      Geiiga, ColoTim, hnichols, skohayes, Lujane

      how long before those "stipends" start getting cut, and cut, and cut ...

      "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

      by nosleep4u on Fri Feb 15, 2013 at 12:58:19 PM PST

      [ Parent ]

    •  wait what (3+ / 0-)
      Recommended by:
      hnichols, RedPrairie, Lujane

      monthly stipend paid to each kansas resident...

      Free money?  From the gubmint?  Why that's just Kenyan socialist Nazi Communism!!!

      Conservatives need to realize that their Silent Moral Majority is neither silent, nor moral, nor a majority.

      by nominalize on Fri Feb 15, 2013 at 02:30:03 PM PST

      [ Parent ]

    •  Up to the poverty level (1+ / 0-)
      Recommended by:

      I'm having a hard time understanding the points they're trying to make at that link, with regard to the "rebate" they're talking about, maybe you understand this better than I do.
      If you're making above the poverty level, you wouldn't get a rebate, so why would they send out checks to people that don't qualify?

      “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

      by skohayes on Fri Feb 15, 2013 at 03:39:37 PM PST

      [ Parent ]

  •  Wow,You May Pass "Blue" WA State Which I Recall (3+ / 0-)
    Recommended by:
    Geiiga, hnichols, Lujane

    is presently most regressive.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Fri Feb 15, 2013 at 12:29:12 PM PST

  •  This part... (6+ / 0-)
    Recommended by:
    jabney, Geiiga, hnichols, skohayes, blukat, Lujane
    "At the consumption Level":  Taxes should only be paid once, which means business to business transactions are excluded.  If a plumber buys plumbing supplies to install in your house, the plumber does not pay the consumption tax on those items, because he is not consuming the product.  The tax is collected at the point of consumption, which in this case would be the individual.  The plumber would collect the tax at the point of sale, just as they currently do for sales tax.  When an Engineering firm provides design services to a manufacturing firm to build a new facility in Kansas, they are not subject to state tax.  The consumption tax is only paid at the point of consumption.
    Seems to me this could be a point where people are going to try and game the system to avoid the consumption tax.  Is it in the realm of possibility that someone could work a scam whereby they pretend to be a middle-man in a transaction (the plumber in this case) but in reality be the end user?  They get the good or service and avoid paying the tax.
    •  Exactly. (6+ / 0-)
      Recommended by:
      jabney, Geiiga, ColoTim, hnichols, skohayes, Lujane

      This whole thing is rigged in favor of those with the resources to shift point-of-purchase.

      The poor, who have to shop locally, will be unable to avoid the tax.

      Wealthier people can set up dodges. For instance, set up a shell corporation which does nothing but purchase goods and distribute them to your family. Obviously the company pays no taxes. And since it charges nothing for the goods, there's no tax there either. When the shell company is low on cash, just give it an "investment".

      "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

      by nosleep4u on Fri Feb 15, 2013 at 01:12:19 PM PST

      [ Parent ]

    •  The more I read the worse it gets (3+ / 0-)
      Recommended by:
      tmservo433, Geiiga, Lujane

      If you look at the slide show that campionrules posted just above,

      They are planning on 7% growth in consumption over the next 4 years.
      Because, according to one of these idiots, if we cut all these taxes, corporations will FLOCK to the state and give us millions in new revenue:

      Eliminating the corporate income tax,  the capital gains tax and the death tax should produce the economic boom that we need.

      And who is going to pay for the economic boom? Not the wealthy. Not the corporations. They think they're going to get blood from a stone.

      “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

      by skohayes on Fri Feb 15, 2013 at 03:50:59 PM PST

      [ Parent ]

  •  Maybe Johnson County will get a break (3+ / 0-)
    Recommended by:
    Geiiga, ColoTim, hnichols

    and they'll decide to unleash Godzilla on Sedgwick County instead.

    Gotta share that monster love....   :)

    "There is nothing more exhilarating than to be shot at without result." - Winston Churchill

    by Dingodude on Fri Feb 15, 2013 at 12:59:53 PM PST

  •  No offense, but it seems like evolution (3+ / 0-)
    Recommended by:
    Stude Dude, hnichols, Shane Hensinger

    is concentrating all the dimmest, ugliest, most degenerate bulbs in that general region, so you might want to relocate before they decide you're engaged in sorcery and start building pyres.

    Pour yourself into the future.

    by Troubadour on Fri Feb 15, 2013 at 01:53:09 PM PST

  •  Here's why cutting taxes won't work (3+ / 0-)
    Recommended by:
    hnichols, skohayes, Lujane

    The idea is that it will "attract businesses".  But I'm curious.  How many business owners would move to Kansas for low taxes, when they can move to Texas or Florida for the same low taxes, only

    a) much bigger markets
    b) much faster growing markets
    c) links to foreign markets
    d) major airports and more major highways

    Not to mention non-business stuff:
    a) major metropolises with amenities that attract employees, from culture to more elite private schools (Kansas doesn't even have Kansas City)
    b) major pro sports teams for cachet and corporate schmoozing
    c) all-year golf weather
    d) beaches
    e) thriving tourist and resource industries
    f) the power and swagger that come from being a "big" state

    Kansas can't compete with the likes of Texas and Florida.  It has to offer something these states DON'T offer. Things like guaranteed paid parental leave, better services and wages, etc.  Of course, those things cost money, and the good people who run Kansas want a quick fix with no sacrifice to earn it.  

    We'll see how that goes.  

    Conservatives need to realize that their Silent Moral Majority is neither silent, nor moral, nor a majority.

    by nominalize on Fri Feb 15, 2013 at 02:28:16 PM PST

    •  It's something republicans always say. (1+ / 0-)
      Recommended by:

      It's a mantra. They say we're being "business friendly" or we're "creating jobs". They don't even think about it. It's just a cover for screwing poor people and helping the wealthy. It has nothing to do with what they claim.  

      I doubt if they even believe it themselves.

  •  There are poor Republicans, especially out (3+ / 0-)
    Recommended by:
    RedPrairie, Geiiga, Lujane

    in "flyover" land, how much will they take before they will stop caring that brown people get anything?

    •  Kansas is so ethnically white (2+ / 0-)
      Recommended by:
      Geiiga, Lujane

      That outside of a few areas in the state, any population that isn't white is damn near non-existent.

      So, they get to avoid that and just project that it's "those people" in Wichita, Junction City, Kansas City who aren't as pure as the driven snow that are screwing them over..

      But then again, that's the same areas that are "spiritually darkened"

      Gandhi's Seven Sins: Wealth without work; Pleasure without conscience; Knowledge without character; Commerce without morality; Science without humanity; Worship without sacrifice; Politics without principle

      by Chris Reeves on Fri Feb 15, 2013 at 04:54:24 PM PST

      [ Parent ]

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