Voice For Liberty

Author: Guest Author

  • AIG hysteria tramples liberty

    From Dave Trabert, president of the Flint Hills Center for Public Policy.

    The Founding Fathers, who took such deliberate care to preserve personal liberty in our Constitution, would be ashamed by the hysteria and pandering that have consumed Washington, D.C., over bonuses paid to employees of American International Group.

    There is no justification for rewarding people for failure, but the conduct of elected officials calling for legislative retribution is far more egregious.

    Members of both parties are tripping over one another in a rush to endorse legislation that would tax bonuses paid to employees of companies receiving bailout money at rates as high as 90 percent.

    Not that Congress should be giving away taxpayer money for handouts to failed companies, but it easily could have prevented this mess by putting some restrictions on the money.

    Taxpayers are justifiably angered by the lack of fiduciary responsibility, and Congress is predictably responding with diversionary tactics.

    House Minority Leader John Boehner, R-Ohio, hit the nail on the head, saying, “This bill is nothing more than an attempt for everyone to cover their butt.”

    As unseemly as that is, it pales in comparison with the assault on the Constitution and our personal freedom. Rep. Ron Paul, R-Texas, called the legislation “an ex post facto bill as well as a bill of attainder, which is unconstitutional, so they’re using the tax code to punish people.”

    “Ex post facto” is a legal term referring to an attempt to go back in time and apply new circumstances to something that already has occurred. A bill of attainder is a legislative act that singles out an individual or group for punishment. Both are prohibited by the Constitution.

    Some members of Congress may be acting like children, but this isn’t a game in which the rules can be changed to alter the outcome. It is of paramount importance that Congress act responsibly to preserve the principles of liberty and freedom. Today the issue is bonuses paid to AIG employees, but there are endless opportunities to use the tax code punitively.

    For example, House and Senate leaders are pursuing the elimination of secret balloting in order to make it easier for unions to form. Imagine if they decided to encourage the behavior they wanted by imposing special taxes on nonunion workers.

    Using the tax code to punish people who raise the ire of Congress is wrong under any circumstance.

    If Congress really wants to show leadership in going after those responsible for this latest abuse of taxpayer money, it should pass the hat at the next joint session.

    In the meanwhile, we must send a very strong message to Washington:

    Knock off the grandstanding, start acting like the leaders you promised to be, and keep your hands off our constitutionally guaranteed freedoms and liberties.

  • Taxes in Kansas at an All-Time High

    Taxes in Kansas at an All-Time High
    By Dr. Barry Poulson

    At no other time in the state’s history have state and local governments imposed such a heavy tax burden on Kansas residents. This year, state and local taxes will capture 11.2 percent of the state’s income.

    The graduated income tax contributes to this all time high by creating a boom of revenue and spending during prosperous economic times. In periods of rapid growth, income tax revenue increases faster than income. Excited by these new funds, legislators increase state spending with new or expanded programs to match.

    With this boom often comes a bust. In a recession, income tax revenue falls more rapidly than income. Politicians offset the shortfall with “temporary” taxes, fees, and debt. That additional revenue is then built into permanent spending programs, and the “temporary” taxes, fees, and debt rarely disappear. With the exception of Nebraska, the state has raised individual and corporate income taxes more than any other state in the region.

    This boom and bust of revenue and spending was especially evident during recent economic cycles. Throughout the 1990’s, the economy grew and revenue increased more than 7 percent per year, outpacing the growth in income of only 5.2 percent. When recession hit in 2001, the state found itself with a shortfall. Most of it was due to declines in personal and corporate income tax revenue. As they had in prior recessions, politicians responded by increasing taxes and fees, and by issuing more debt.

    Paralleling the increased tax burden has been an unprecedented increase in the debt burden imposed by the state on its citizens. In 1992, Kansas’ government debt was around $424 million, a lower than average level for a state of similar size. By 2005, debt had swelled to $3.95 billion, an increase of nearly 832 %.

    The current budget is projected to incur a deficit of half a billion dollars. During the recent recession, state spending continued to grow despite the fall in revenue. Initially, spending from state general funds decreased as the recession hit, but they have since recovered. Even with a recovery from the recession, revenue growth will not be enough to fund current policies.

    In fact, the unconstrained growth of state spending has far outpaced the growth in personal income for the last three decades. Limiting our scope to the last three budget cycles, we find that General Fund spending increased 8.6%, 9.6%, and 8.6%. In the current budget, state General Fund spending is projected to increase an incredible 18%, far outstripping the growth in the state economy.

    In recent years, Kansas has been in a race to the bottom to become the most heavily taxed state in the region. While Kansas has been raising taxes and adding debt, surrounding states have pursued more prudent tax policies.

    The sharp increases in spending, taxes and debt have resulted in a decline in the state’s business climate. Throughout the last decade, Kansas has consistently ranked among the bottom group of states in business tax climate. Among the surrounding states, only Nebraska has a lower business tax climate ranking.

    Kansas has been an underachiever in economic growth during the past decade. The difference is exacerbated when compared to the more rapidly growing neighboring states like Colorado. At one time, Kansas had a larger population and higher Gross State Product than Colorado. As Colorado’s individual and corporate income taxes were reduced, their population and Gross State Product outgrew Kansas.

    A heavy tax burden is a major factor contributing to slower growth in some states, and Kansas in recent years has fallen into this category of one of the nation’s heavily taxed states.

    Dr. Barry Poulson is a professor of economics at the University of Colorado and a distinguished scholar with Americans for Prosperity.

  • High tax Kansas exposed again

    High Tax Kansas Exposed Again
    By Karl Peterjohn, Executive Director, Kansas Taxpayers Network

    Businesses and homeowners know that Kansas has high taxes. The appointed and occasionally elected officials setting this state’s fiscal policy are often contemptuous of the fiscal burden being imposed upon Kansans but this is a reality that should not continue to be ignored.

    USA Today reported July 28 that Kansans pay the 14th highest level of per capita property taxes among all 50 states. This was 2004 Census Department data. The high property tax in Kansas means that Kansans pay well above the U.S. average property tax too. This is a bigger problem for Kansans because income in Kansas is only 93 percent of the U.S. average. The number one and two states having the highest property taxes in this survey, New Jersey and Connecticut, both have higher than average income levels.

    The high Kansas property tax creates several surprises that are being ignored by public officials. This includes residential and farm property tax hike advocates like Governor Sebelius. Since there are high taxes on property in Kansas there is a relative decline in housing prices. When relatively hidden property taxes, like special assessments, are included on newer housing, the property tax burden is actually higher since most other states do not impose this extra property tax burden.

    So national surveys look at affordability in housing and Kansas scores well. There is a lot of reasonably priced housing that has large property tax bills on it in this state.

    Since capital goes where it is appreciated, there is a relative decline in business here so commuting times are low. When business leaves, so go the jobs. Kansas employment growth lags behind the U.S. average. According to the governor’s most recent Economic and Demographic Report for the 2007 state budget, show Kansas job growth and income levels both lagging behind national and regional growth. So, it should not be a surprise that public school enrollment continues to decline too. Job seekers take their children with them.

    When Kansas students graduate and enter the job market they often discover that economic opportunity is not in Kansas and they move to more economically vibrant and competitive areas. Even former Governor Graves joined this exodus and left Kansas. Often these folk become “Kansas tourists” who return to see family at Christmas, Thanksgiving, or maybe for a week in summer.

    Affluent Kansans have a tendency to move to states without income taxes as well as states where there are limits on government growth like Colorado with their Taxpayers Bill Of Rights. Colorado scored 23rd on per capita property taxes but far exceeded national income averages.

    Oklahoma, which requires super-majorities for some tax hikes and voter approval before state taxes are raised, had the lowest property taxes in this region scoring 47th nationally. Arkansas scored 49th while Alabama was 50th. Missouri was 37th. It is interesting to note that only Nebraska has a lower percentage growth in population than Kansas according to Census figures. Nebraska’s average property taxes were only a couple of notches lower than Kansas at 16th.

    This per capita rating does not adjust for the wide variance in property taxes within or between states. Utility property is the highest taxed in Kansas with a 33 percent assessment that is almost three times higher than the 11.5 percent assessed on residential property. Small businesses in Wichita pay a much higher proportion of property tax on $100,000 of commercial property than Boeing or Cessna who enjoy their 100 percent property tax abatements. The details in taxation matter a lot.

    The average Kansan may not know the tax details but they do know that when all else fails, they can still vote with their feet. The fact that neighboring Arkansas has now passed Kansas in population is a wake up call that is being ignored by Kansas public officials. High Kansas property taxes in particular and high Kansas taxes in general are both reasons for Kansas’ decline.