We broke the story about how all non-Koch-affiliated written testimony related to a bill that would close Kansas’ Koch LLC loophole wanted the loophole closed. New projections released yesterday have Kansas expected to experience massive revenue shortfalls that Governor Brownback intends to close by borrowing against future revenues (originally intended for children’s programs) and making painful cuts to state highway and education budgets. The dirty little secret is that many small businesses actually oppose the so-called “small business tax cuts” that cost the state more in annual revenue than the entire anticipated shortfall. Support for the Koch LLC loophole, which likely directly benefits Charles and David Koch financially, seems to come primarily from Koch-affiliated groups.
One Kansas legislator described the state’s persistent fiscal problems accurately more than a year ago:
robbing schoolchildren “to pay Charles and David” [Koch] (Source)
Now, it appears that support for the controversial Koch LLC loophole, which deprives the state of $261 million in annual revenue, is concentrated among Koch-affiliates. Though marketed as a “small business tax cut”, many small businesses in the state testified against the provision. In addition, an informal survey of Wichita small businesses found that a full 80% of them opposed the Koch LLC loophole. A couple state small business membership organizations have also denounced the provision.
The current legislative agenda of the Kansas City Chamber of Commerce states:
The KCK Chamber supports fixing the “LLC Loophole”
Tracey Osborne, the President of the Overland Part Chamber of Commerce, wants a repeal of the Koch LLC loophole:
The chamber supports revoking the pass-through business income exemption, which Osborne contends has had “detrimental across-the-board impacts to our state to pre-K-12 education, higher education, transportation and social services.”
It seems that many Kansas small businesses don’t even want the so-called “small business tax cuts.” Governor Brownback and the Kansas legislature should call them what they are: a massive giveaway to the Governor’s cronies at Koch Industries, which is directly responsible for forcing the entire state down a path to fiscal ruin.