Kansas Tax Cut Hasn't Created “tens of thousands of jobs.”


tay
#1
Kansas has a problem. In April and May, the state planned to collect $651 million from personal income tax. But instead, it received only $369 million.


In 2012, Kansas lawmakers passed a large and rather unusual income tax cut. It was expected to reduce state tax revenue by more than 10 percent, and Gov. Sam Brownback said it would create “tens of thousands of jobs.”


In part, the tax cut worked in the typical way, by cutting tax rates and increasing the standard deduction. But Kansas also eliminated tax on various kinds of income, including income described commonly — and sometimes misleadingly — as “small-business income.”

Basically, if your income results in the generation of a Form 1099-MISC instead of a W-2, it’s probably not taxable anymore in Kansas.
Consider me. I draw a salary from The New York Times; if I lived in Kansas, I’d pay state income tax on it. I also earn income from other news outlets, including MSNBC, where I am not a payroll employee. That makes me a “small-business owner” in the eyes of the government, and if I lived in Kansas, my income from MSNBC would be tax-free.


While no state has gone as far as Kansas, four others — Missouri, Ohio, Oregon and South Carolina — have passed laws in the last decade that give some small-business owners lower tax rates than wage earners.


By creating this preference for some types of income over others, Kansas has run into at least five problems:


The Times has me on its staff, but it could commission freelance work from me instead. Income from the same work would then become tax-free under the Kansas rules.


A lot of the beneficiaries of the tax break won’t be small businesses.

Many are sole proprietors like me, who are fundamentally engaged in labor, not entrepreneurship, and aren’t likely to hire anybody just because they receive a tax break.




more


http://www.nytimes.com/2014/06/29/up...=business&_r=0
 
Walter
+4
#2  Top Rated Post
It's terrible to let citizens keep more of their own money.
 
mentalfloss
+2
#3
Tax cuts create jobs lol
 
Walter
+1 / -3
#4
Quote: Originally Posted by mentalflossView Post

Tax cuts create jobs lol

Works every time.
 
mentalfloss
+2
#5
 
captain morgan
Bloc Québécois
+3
#6
Quote: Originally Posted by mentalflossView Post

Tax cuts create jobs lol


Whereas it's a given that tax increases are great for creating soooo many new jobs.... And the workers love new and bigger tax increases on their income.
 
taxslave
No Party Affiliation
+3
#7
Tax cuts create jobs in ways government has difficulty tracking. More money in workers pockets means nore disposable income to buy goods and services. It would take a special kind of tax relief to suddenly create 10000 new jobs in a state with little industry. Mostly they would have to import industryfrom another high tax area.
 
mentalfloss
+1
#8
Quote: Originally Posted by captain morganView Post

Whereas it's a given that tax increases are great for creating soooo many new jobs.... And the workers love new and bigger tax increases on their income.

I'm glad we agree that tax policy does not have a direct effect on job creation.
 
IdRatherBeSkiing
+2
#9
I think tax cuts if done correctly can create jobs. General income tax cuts create more disposable income which causes people to spend more which causes more money flowing which creates more jobs (and higher tax revenues as you have more taxpayers). Specific cuts to business who will hire employees can also cause this but in my mind to a lesser effect particularly if the cuts are not tied to job creation directly.

I think in this case they probably cut the wrong tax in the wrong way.
 
gopher
No Party Affiliation
+4 / -1
#10
Tax cuts are no guarantee of creating jobs nor does increasing them hamper job growth. We had lower taxes in Gopherland under Republican Pawlenty and had higher unemployment. Now under Democrat Dayton taxes are slightly higher but unemployment is lower.

The better way to raise state tax revenue is as I have suggested before = create a tax amnesty program like we had in NYS back in the early 1980s. That generated much more revenue than was anticipated and it can work again.
 
EagleSmack
+2
#11
Quote: Originally Posted by taxslaveView Post

Tax cuts create jobs in ways government has difficulty tracking. More money in workers pockets means nore disposable income to buy goods and services. It would take a special kind of tax relief to suddenly create 10000 new jobs in a state with little industry. Mostly they would have to import industryfrom another high tax area.

Yes yes but that gives money back in the hands of the unwashed and they will spend or save how THEY see fit. The all knowing government knows better how to spend their earnings. This is a crime.

Oh...and it hurts women and children.
 
IdRatherBeSkiing
+1
#12
Quote: Originally Posted by EagleSmackView Post

Yes yes but that gives money back in the hands of the unwashed and they will spend or save how THEY see fit. The all knowing government knows better how to spend their earnings. This is a crime.

Oh...and it hurts women and children.

Will somebody please think of the children?!
 
Nuggler
#13
women and children first !
 
captain morgan
Bloc Québécois
+1
#14
Quote: Originally Posted by NugglerView Post

women and children first !


Agreed... We'll tax the sh*t outta them first and then deal with any shortfalls amongst us menfolk
 
Corduroy
+2
#15
Quote: Originally Posted by taxslaveView Post

Tax cuts create jobs in ways government has difficulty tracking. More money in workers pockets means nore disposable income to buy goods and services.

What kind of jobs can the government not track that tax cuts create?
 
Walter
+2 / -2
#16
Quote: Originally Posted by gopherView Post

Tax cuts are no guarantee of creating jobs nor does increasing them hamper job growth.

You're daft; how does taking money away from the citizens not hamper growth.

Quote: Originally Posted by CorduroyView Post

What kind of jobs can the government not track that tax cuts create?

Underground economy. I use cash whenever I can to avoid taxes.
 
gopher
No Party Affiliation
+3 / -1
#17
Wally - how the fckk can you possibly know more about what the fckk is going on in Minnesota than I do?

If you in your twisted thinking do not believe that what I have written is correct, then why the hell don't you present some type of proof that the facts are contrary to what I have written? Unemployment is lower, building is booming, we have a new transit light rail system that is working well, the Republican created deficit has been fully reversed, and the quality of life is at the highest I have seen in over 25 years of living in this state. So what the fckk is your problem with these truths?
 
Angstrom
Liberal
#18
Quote: Originally Posted by NugglerView Post

women and children first !

and the immigrants too.

Cause white males are so dominant strong and intelligent everyone else in the country needs government help to keep them at the same competitiveness level.
 
Kreskin
+2
#19
I would like to see more tax breaks for sole proprietorships. All other ownership entities have more opportunities to better manage taxes, yet the sole proprietor is the one who often needs it the most. I'm not talking lower rates. More deferral opportunities (a pseudo dividend system) would be a start.
 
taxslave
No Party Affiliation
+1
#20
Quote: Originally Posted by CorduroyView Post

What kind of jobs can the government not track that tax cuts create?

Almost all where there is no program that asks businesses how many new hires are due directly to tax cuts. If joe retires and charlie is hired it is nothing to do with tax cuts. Also many self employed simply do not have the time to fill out useless government forms.
The increases in employment are sutle and take time to come about as first people have to amass some of that revenue to start shopping with.

Quote: Originally Posted by KreskinView Post

I would like to see more tax breaks for sole proprietorships. All other ownership entities have more opportunities to better manage taxes, yet the sole proprietor is the one who often needs it the most. I'm not talking lower rates. More deferral opportunities (a pseudo dividend system) would be a start.

Sole proprietorship is a silly idea except for part time business. If you are turning over substantually more than a paycheque incorporating will save you money. Pay yourself a small wage and a large dividend.
 
Walter
+1 / -1
#21
There should be no tax save a consumption, or so-called, "fair tax".
 
Kreskin
#22
Quote: Originally Posted by taxslaveView Post

Almost all where there is no program that asks businesses how many new hires are due directly to tax cuts. If joe retires and charlie is hired it is nothing to do with tax cuts. Also many self employed simply do not have the time to fill out useless government forms.
The increases in employment are sutle and take time to come about as first people have to amass some of that revenue to start shopping with.



Sole proprietorship is a silly idea except for part time business. If you are turning over substantually more than a paycheque incorporating will save you money. Pay yourself a small wage and a large dividend.

I had a small business (internet). Revenue was minor and made no sense to incorporate. Then I had someone offer to buy the site at a value I couldn't refuse. It cost me an arm and a leg in capital gains. What really ticked me off was I built it with an incredible amount of my own time which I couldn't pay myself for. Then when the sale happened I just had to take my lumps on a high tax rate and hand over the cash to the government (for basically nothing). Would've been nice (and fairer) if there was some form of partial exemption or deferral. As I look back there was nothing different I would've done. Only thing would've been to claim some capital appreciation from year to year over a decade but that required more hindsight than was really reasonable. I had no idea the value would amount to anything.
 
tay
+1
#23
UPDATE








The graveyard is where the economy of Kansas has been buried since 2012, when Brownback and his Republican state legislature enacted a slew of deep tax cuts in a tea party-esque quest for economic "freedom."


"Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy," he promised then. Brownback's tax consultant, the supply-side guru Art Laffer, promised Kansans that the cuts would pay for themselves in supercharged economic growth.


Instead, job growth in Kansas trails the nation. The state's rainy-day fund is dwindling to zero. Month after month, revenue comes in even lower than fiscal officials' most dire expectations.


In the rest of the country, school budgets are finally beginning to recover from the toll of the last recession; in Kansas, they're still falling. Healthcare, assistance for the poor, courts, and other state services are being eviscerated.


Who's benefiting? The rich, including those proud offspring of Wichita, Kan.: the Koch brothers.


Despite all this, Brownback resorted to an op-ed in the Wall Street Journal a few weeks ago to declare that "the early results are impressive." Among other statistics he cited, "In the past year, a record number of small businesses — more than 15,000 — were formed."


Yes, but as shown by the Center on Budget and Policy Priorities, a Washington economic think tank, 16,000 disappeared. And many of those businesses that Brownback crowed about were surely created to take advantage of one of the tax-cut quirks Brownback enacted. This is the elimination of all taxes on partnerships, sole proprietorships, and LLCs that pass through their tax liabilities to their owners. That allows everyone from freelancers and petty contractors to huge partnerships to avoid any state income tax at all, as long as they're organized as a certain type of "small business."


Brownback's policy, and his claims about its outcome, define the term "ideological" -- the imposition of preconceived notions on a contradictory reality.


Brownback continues to promise his citizens that growth is just around the corner. But there's no evidence that the kinds of cuts he promoted have anything to do with genuine economic growth. Indeed, it's likely that preserving the quality of crucial state services is more important. That's a policy pursued in California under Gov. Jerry Brown, who successfully pushed to raise taxes after the recession; the state's job growth since then has left Kansas and the country as a whole in the dust.


"States considering deep tax cuts in hopes of sparking a surge of economic growth should look carefully at Kansas," the CBPP suggested in March.




more


How Tea Party tax cuts are turning Kansas into a smoking ruinÂ*-Â*Los Angeles Times
 
Walter
-2
#24
But Rodent says everything is better with BHO.
 
eh1eh
+1
#25
Tax cuts allow people to keep more of their money and spend it on Chinese goods.
Creates jobs in China that's why government 'has trouble tracking' these jobs.
 
gopher
No Party Affiliation
+2 / -1
#26
Quote: Originally Posted by WalterView Post

But Rodent says everything is better with BHO.


Perhaps senile Wally should read the link's actual message which is that the state's policy has caused this: Instead, job growth in Kansas trails the nation.



 
tay
+1
#27
104 Kansas Republicans back Democratic candidate after Brownback's vindictive politics and tax cuts destroyed the state's finances






On Tuesday, a group of 104 Kansas Republicans announced that they would endorse Democrat Paul Davis for governor, rather than incumbent Republican Sam Brownback.




The unusual mass endorsement comes after years of acrimony between Brownback and his state's moderate Republican faction, which resisted the governor's enormous tax cuts. In early 2012, Brownback moved against several moderate state senators,supporting primary challenges against them. Outside money from groups like Americans for Prosperity poured in.


It's only the latest bad news for Brownback, who has trailed Davis in several recent polls. Since Kansas passed Brownback's massive tax cut, revenues have plummeted, and the state's bond rating has been downgraded.




Why 104 Kansas Republicans just endorsed a Democrat for governor - Vox






Kansas was supposed to be the GOP’s tax-cut paradise. Now it can barely pay its bills






Kansas was supposed to be the GOP’s tax-cut paradise. Now it can barely pay its bills. - Vox





 
Nuggler
+2 / -1
#28
Quote: Originally Posted by gopherView Post

Perhaps senile Wally should read the link's actual message which is that the state's policy has caused this: Instead, job growth in Kansas trails the nation.




Wally will baffle you with his mentally astute RED !
Don't confuse him with facts.

I'm still laughing at the Ronnie Raygun trickle down thing.
 
B00Mer
Republican
+1
#29
Trickle down economics promotes giving tax breaks to the rich in the hopes that it will also ultimately help the working class.

The problem is, the rich are not creating more jobs... they are just investing it into luxury items and themselves..

When is somebody just going to take all the gravy tax breaks away from the rich, corporations or politically connected and just institute a flat tax and treat everyone equally..

John Stossel - The Flat Tax - YouTube

 
captain morgan
Bloc Québécois
+1
#30
Quote: Originally Posted by B00MerView Post

Trickle down economics promotes giving tax breaks to the rich in the hopes that it will also ultimately help the working class.

The problem is, the rich are not creating more jobs... they are just investing it into luxury items and themselves..

When is somebody just going to take all the gravy tax breaks away from the rich, corporations or politically connected and just institute a flat tax and treat everyone equally.

Trickle down economics promotes lowering taxes to all, including corporations and the rich... This puts more money in everyone's pockets that has a far better chance of making it back into the local economy and promoting faster growth than if the taxes are increased... Gvt makes a lot of money from things like sales tax based on the notion that you see more transactions... The logic being, take a smaller cut, but expect far more transactions that will deliver higher overall revenues then if you have a higher rate with fewer transactions

Add to this that corp tax rates are competitive and there is a stronger chance that business' will remain in this jurisdiction in addition to attracting more companies to relocate there with the jobs that follow.
 

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