Wednesday evening in his second State of the State address,
Governor Samuel Brownback of Kansas showed he will treat the
state’s tax rates even more harshly than his staff treats
potty-mouthed high school Tweeters.
With some of the most dramatic proposals put forth anywhere in
the country, Brownback explained his new plan to combine three tax
brackets into two lower rates while eliminating the double taxation
of income from small business owners of LLCs. Cutting in state
government will include not filling 2,000 positions, eliminating
eight state agencies, and expanding the efforts of the new
“Office of the Repealer,” run
by Kansas Department of Administration Secretary Dennis Taylor,
which exists solely to find burdensome regulations and laws to
eliminate.
Brownback’s noted that in seven years, 15,600 Kansans have moved
from the state, chasing economic opportunities elsewhere. He
believes lower tax rates and pro-growth policies will be conducive
to economic growth.
However, to achieve those lower rates, loopholes and deductions
will have to be adjusted, and if immediate
reaction in local papers is any indication, eliminating the
home mortgage deduction, which is worth $390 to the average Kansas
family, will be especially difficult. Other deductions to be
eliminated are for adoption and day care.
The nonprofit Kansas Policy
Institute’s James Franko had lots of praise for Brownback’s
address, but wished he’d heard more specifics about the looming
disaster of public pensions, the same issue that is ravaging state
budgets across the country. “The proposed cuts are better than the
spending increases we’ve seen in prior years,” Franko told TAS,
“but with Medicaid and KPERS [Kansas’ public pension system] costs
set to grow rapidly, all other SGF spending needs to be reduced by
about $300 million to keep Kansas from going over the cliff.”
Brownback did at least note that KPERS is the second-worst
funded public pension in the country, with a true $15 billion
unfunded liability. As such, he added, it is certainly an issue the
legislature will have no choice but to face soon.
Watch the whole speech
here.
RJ| 1.12.12 @ 11:24PM
The second paragraph of this article is very welcome news. I am especially grateful to Governor Brownback for establishing the Office of the Repealer. I hope each state adopts a similar procedure.
However, I think this concept needs to go further. I believe that the US Constitution should be amended to establish a fourth branch of government, the Revocation Branch. Its only authority would be to repeal existing legislation which has been in effect for a reasonable period of time (say 5 years), so that there would be some record as to its merit or lack of merit. The Revocation Branch's authority would operate similarly to the Presidential veto. It could not pick and chose elements of a piece of legislation.
The Revocation Branch would serve as a check and balance against inefficient government and perform a task which the legislature fails to do adequately.
Following the philosophy of the Constitution, the Revocation Branch could be filled by 9 Revocators, with 3 being selected every 2 years at the end of a session of Congress. The House of Representatives, on behalf of the citizens, voting by state delegation would select one; The State Governors, representing the states' interests, would select one; and the President, representing the Executive branch's experience in administering the laws, would nominate one. Revocators would be eligible to serve only one 6 year term and would not be permitted for a significant duration following their term (say 6 years) to represent or serve in any federal, state or local entity of government. (If you are interested in this idea, the Opinion section of the Orange County Register website has my essay on this topic, dated May 26, 2011.)
Gerry| 1.13.12 @ 6:22AM
Very informative. Thank you! I appreciate what you have to say at the Spectator.
G Harmon| 3.18.12 @ 12:57AM
There is no double taxation on LLCs. The profit is not taxed at the company level. The profit is passed through to the owner who reports it on schedule C as net profit after expenses. That amount is transferred to the front of form 1040 line 12.