Like A Kansas Tornado, Con't

The coming shortfall in Kansas's state budget is now official, and Gov. Brownback's tax cuts completely failed to create hundreds of millions in new revenue for the state as promised.  Now the plan to balance the state's budget will fall on the poor with a new hike in the state's sales tax.

"You've got policymakers at this point who are unable to embrace the fact that there was a mistake made," said Annie McKay, the executive director of the left-leaning Kansas Center for Economic Growth. The think tank in Topeka argues that the state's deficit can't be eliminated without reversing some of the income tax cuts Brownback made in 2012. 

Poor and working-class Kansans already carry a heavy burden under the state's tax system, compared to people of modest incomes in most other states. Among the fifth of the Kansas population with the lowest incomes, the average person pays 11.1 percent of what they make in state and local taxes, including sales taxes. Among the wealthiest one in every 100 Kansans, the average tax bill is just 3.6 percent of annual income, according to a recent report from the Institute for Taxation and Economic Policy. 

So the poorest Kansans have three times the tax burden as the wealthiest do, and that burden is about to be dramatically increased.

People who make less are more vulnerable to increases in sales and excises taxes, since they spend more of their money buying basic goods and services they need to get by. This is especially the case in Kansas, where food is subject to sales tax. Kansans can receive a tax rebate for their food purchases, but those who make nothing or too little, to owe income tax aren't eligible. The pay the sales tax on food in full. 

The defense of the plan to raise sales and excise taxes -- the sales tax would increase from 6.15 percent to 6.3 percent, under one proposal -- is that people should be taxed on what they spend, not what they make, so as not to penalize them for earning more but instead to encourage them to save and invest their money. 

"You're moving from taxing a productive activity to taxing a consumption activity," said Joseph Henchman of the nonpartisan Tax Foundation. "Most economists will say that it is good for economic growth." 

In practice, though, people who don't have much money can't save or invest it. They have to spend it to get along. The more you make, the smaller the fraction of your income you have to spend to cover the basics. And wealthier households, which spend more on luxuries and entertainment, can always give up some of their purchases and keep the money in the bank if they don't want to pay the higher rate. 

As a result, raising the sales tax equally for everyone means asking poorer households to pay significantly more, relative what they earn.

And remember, this is what Kansas voters cast their ballots for.  Or, at least the ones that bothered to vote did, anyway.  Austerity economics is failing miserably in Kansas, and in 2016, the GOP plan is to bring it to all 50 states.

Might want to start giving a damn, then.