In a story that has largely been ignored by the mainstream media (outside of Kansas), Kansas state tax policy has eviscerated the state budget:
Income-tax cuts in Kansas championed by Governor Sam Brownback have led to credit downgrades, political turmoil and deepening budget deficits.
The revenue shortfalls have forced painful cuts to education and health care. One of the primary causes of the shortfall is a tax loophole that allows pass-through LLC entities (including those affiliated with Koch Industries and/or the Koch Brothers, who reside in Kansas) to pay NO STATE INCOME TAX. One of the Kansas legislators outlined the problem in a Bloomberg News article:
“When people figured out they could create a business and filter their income through it and avoid paying taxes, who isn’t going to do that?” said state Representative Mark Hutton, a Republican from Wichita. "This is only going to get worse."
In March, the legislature introduced a bill that would raise revenue by closing a loophole that allows pass-through LLCs to pay NO STATE TAX while reducing the state’s high sales tax rate on food. In Rep. Hutton’s words:
Rep. Mark Hutton, R-Wichita, said that HB 2444 would help restore fairness to the state’s tax system….
“Everybody eats,” Hutton said, contending that the bill would do more to help the average Kansan than the tax break for business owners.
The Koch-backed group Americans for Prosperity, however, saw the trade-off differently:
The proposal faces opposition from influential interest groups Americans For Prosperity and the Kansas Chamber of Commerce.
Jeff Glendening, AFP’s state director, said rolling back the business income tax exemption would break a promise to business owners. “You’re taking money from job creators,” he said.
So, there you have have it; Koch-backed Americans for Prosperity doesn’t care that poor people in Kansas have to pay "one of the nation’s highest sales tax rates on food" while Koch-related pass-through LLCs pay NO STATE TAX on income that ultimately passes through to entities controlled by two of the wealthiest people in America.
AFP objects to “taking money from [Koch Industries]” but has no problem “taking money” from the poorest residents of Kansas.