In 2012, the legislature of the state of Kansas passed a bill that “allows about 300,000 independent business owners to pay no state tax on the bulk, if not all, of their income”(MONTGOMERY). This bill was created in order to put more money into the hands of businesses, and to create jobs. In fact, Kansas Governor Sam Brownback (R) said in an interview that this tax cut for Limited Liability Companies would be like a “shot of adrenaline into the heart of the Kansas economy”(“Big Tax Cuts Come Back to Bite State Governments”). Unfortunately, once the tax cuts passed, high income individuals in Kansas created Limited Liability Companies in their name, with themselves as the singular employee. Because of this, those individuals were no longer …show more content…
As a result, “revenue from the state's individual income tax plunged by more than $700 million, a 25% drop”(“Failed Kansas Tax Experiment Holds Lessons for Washington”). Furthermore, there is little to no evidence that the Supposed “Shot of adrenaline” created many jobs in even the businesses that were making use of the policy in an honest way. In fact, according to Jordan Weissmann, a writer for Slate, “a group of economists took stock of the Kansas misadventure, using administrative tax data to figure out whether the cuts had done any good at all. In short, the researchers concluded, they had not”(Weissmann). This is alarming as if the bill did not make progress in decreasing unemployment, then the lost revenue for the state of Kansas must have caused issues in other aspects. Illustrating this point, Jordan Weismann alleges that because the State cut taxes on LLCs, it was required to “cut spending on public schools, colleges, Medicaid, and more”(Weissmann). However, there is still opposition to these ideas among wealthy Americans, Congressmen, and voters. Several arguments are used in opposition to some of the policies that have been suggested in this paper, and in the next few paragraphs, those viewpoints will be refuted. The first of these opposing viewpoints is that because
way to shave millions from the cash-strapped state's expense sheet" (Kirn 1). He claimes that cutting
Texas does outperform other states in terms of economic growth and population growth. Many people move to Texas because of the jobs and they do taxes right. (Batheja, 2013) Gov. Rick Perry believes Texas’s performance through the recession is due to lack of income tax. He says “You can stop trying to figure out how to pay the state income tax, because we don’t have one.” (Batheja, 2013) The Tax Foundation, a conservative-leaning research group, ranks Texas ninth-best on its State Business Tax Climate Index, largely because of the state’s lack of an income tax. (Batheja, 2013) On the other hand, Texas’s high property taxes remains a crucial complaint among business and homeowners. It’s harder for small business to pay their taxes especially if their business wasn’t very profitable. Small business end up using their own personal savings, mortgages, or borrow money in order to pay their taxes. Having a state tax would benefit small business. Although having no state tax is accepted by many, it puts a dent on cities and towns. Local debt has increased over the past decade, in large part to cover the costs for new schools and public maintenance projects. (Batheja, 2013) The state is pushing projects such as building of highways and roads to cities and counties. (Batheja, 2013) In 2012, more than 500 lawsuits were from school districts arguing that our public education isn’t properly
In states without state income tax, higher sales, property and other assorted taxes can exceed the annual cost of a state income tax. Texas is one of seven states that do not levy an individual income tax. The Tax Foundation, a conservative-leaning research group, ranks Texas ninth-best on its State Business Tax Climate Index, largely because of the state’s lack of an income tax. On three of the foundation’s other major rankings — property taxes, sales taxes and corporate taxes — Texas ranks in the bottom 20 states. Texas does not have a statewide property tax, but local property taxes remain a crucial complaint among businesses and homeowners. (Terrence, 2002) The main benefit is that states with no income tax become a beacon for growth. They 're better at creating jobs and keeping a core of young, educated workers from moving to other states. The issue is undoubtedly controversial. Public opinion usually swings with the size of one 's paycheck and the role people think governments should play in shaping society. Texas has an above-average sales taxes, and Texas also has higher-than-average effective property tax rates. Cutting the income tax will boost take-home pay for everyone. It 'll make the state more attractive than its neighbors, creating jobs, drawing new businesses, and sparking an influx of talented workers.
In chapter 10 of Lone Star Tarnished, the author, Cal Jillson explores the development of the state of Texas’ tax policy. He explains that over about the last three decades there have been some major challenges develop involving the state tax revenue including the fact that it is dramatically declining. It is also mentioned that with the Texas Republican Party being the majority party in the state, with no change in site, having implemented the ideology of no new taxes, that any proposed solutions to adjust the state tax policy will probably be rejected. Jillson does however offer some solutions that could resolve some of the issues with the tax policy in the state if the Republican Party would implement them. These solutions include a constitutional reform to amend some of the tax laws in the state to institute a few new taxes such as corporate tax and raising some taxes such as the sales taxes by about half a cent. According to Jillson, these tax modifications could generate more than a billion dollars in revenue for the state, giving it a small sense of financial relief. Even though these proposed solutions could benefit the state, they are no likely to occur because of the low to no tax perception that both Texas government and citizens
Since taking office Sam Brownback has hit Kansas people with many taxes and also tax cuts that cripple the financial state of Kansas.”Brownback wanted to eliminate the earned-income tax credit, which had benefited the working poor”(Judis). By taking this away Sam Brownback hurt the everyday working class person by taking away this money. Some of the poor working
Economic analysis, Jeff Pinkerton, reports that the growth in economy is dependent on out of state money being brought in. When people already living in KC spend
Edin and Skinner begin their article by explaining to their readers that income inequality is a prevalent and complex problem in America today. The authors also point out that although President Obama and several other Democrats have proposed legislative approaches, such as raising the minimum wage and taxing the rich, to combat this problem, it will take a long time for these proposals to become law due to the Republican-dominated Congress. Because the authors believe these laws will take too long to be put into
According to Singers(August 24,2017), ITEP’S (July, 2017), (July, 2017),(August 2011), and(December 2011), higher sales and gas tax in Connecticut have consequences and a solution proposed to reduce tax burden on low income family. Based on the readings and my understanding of this topic, I conclude that increasing sales and gas taxes in Connecticut to fix a budget crisis will be financially harmful to low income families and needs to be address with the new policy. Singer(August 24,2017), pointed out that, Connecticut legislators are deciding to increase the sales tax from its current level to 6.85 percent to fix a budget deficit, estimated to reach $3.5 billion in two years and improve state aid to towns. Based on Tax Foundation studies,
"People say, 'Oh, you're going to get tax cuts up front, but you're going to get tax increases at the end. Don't just look at the end,'" he said. "That's part of the bill. That was their choice to make a lot of middle-income West Virginians pay for tax cuts for the
Sam Brownback has not done this. When his tax plans failed, he tried to cover them up. It is clear that the Kansas economy is failing due to his policy changes: “The Kansas gross state product grew at a faster rate when compared to the region and the nation in three of the five years before he took office in 2011.” In addition, several other indicators of economic welfare show Kansas trailing behind the nation (Abouhalkahl). Rather than taking responsibility for his failure, he has tried to cover it up and has not done anything to fix it. The economic counsel appointed by the governor had been putting out reports of the Kansas economy until recently they stopped. When revealed, almost all indicators told the story of a failing Kansas economy (Abouhalkah). When Sam Brownback realized his plans were failing, rather than admitting to the public his failures and working to fix them, he tried to cover them up. Worse than his inability to take responsibility for the mess Kansas has become, is his relationship with the Koch brothers and the way it affects his policies. The Koch brothers have long time supported the governor, helping to fund and back his campaigns and policies. This support has bought them loyalty. The once wind energy supportive governor is now in favor of phasing out a
Personnel’s became a target for cutting down spending. Positions were abolished, employees were furloughed for three years and there was a decrease in merit based increases. Along with personnel cutbacks, the state cut back on higher education aid, state agency operations and pay-as-you-go capital programs. In Order to keep spending cuts minimum, he focused his attention on increasing revenues. This resulted in hikes in income tax rates and changes to exemption levels; increasing the sales tax, corporate income tax, fees; and efforts to improve tax
“However, the problems of the Missouri economy demand better-focused leadership by business and political leaders across the state and in Jefferson City. Elected officials need to pump more money into infrastructure; especially the state’s underfunded roads system, which may require a tax increase. The state also must revamp its tax credit program to create more 21st century jobs. And Missouri can’t continue threatening financing for its higher education institutions.” (http://www.kansascity.com)
While oil represents about 7 percent of Louisiana 's revenue, its budget structure is more complex than other oil-producing states -- and probably most similar to Kansas in its budget woes, according to Leachman. Edwards 's fiscal 2017 budget proposal includes dramatic cuts to virtually every part of state government: higher education, healthcare, the attorney general 's office, and youth services. Some budget experts trace the start of Louisiana 's revenue problems to the repeal of income tax increases under what has been termed the Stelly Plan, a restructuring of state revenue that also called for lowering the sales tax. The repeal came as Louisiana was awash in one-time revenue, including federal funding to the state to aid recovery
Hederman Jr. executive vice president at The Buckeye Institute said "There are two main strategies that Ohio should employ to attract business and shake off the low ranking," Hederman said. "First, Ohio needs to get rid of business tax expenditures. These hurt businesses and job growth and discourage investment. Second, Ohio should focus on broadening the tax base and lowering tax rates. Implementing these two strategies, and others we have outlined in our Tax Reform Principles for Ohio, will improve our tax climate and will make Ohio an economic engine in the Midwest." (Hederman) Hederman and others have created this Tax Reform Principles for Ohio to try and better the Buckeye state, yet it's barely getting any attention. To instill change it's important to inform the public about the issue and what to
People are becoming aware of the financial discrepancy between upstate New York and New York City. Today, the state cuts taxes across the board and letting the market operate; the state has opted to launch some targeted public and public/private initiatives to reenergize the economy Upstate. New York State will do better by making itself more tax-friendly to businesses and