The following argument in favor of the Fair Tax for Kansas is from Larry Halloran, who is Chairman of the Wichita — South Central KS 912 Group. Also included is a presentation by Earl Long of FairTaxKC. I particularly like his characterization of the Kansas statehouse as the “favor factory.”
The Billion-Dollar Question
By Larry Halloran
Why would the State of Kansas ignore the opportunity to generate a $2.1 billion surplus for fiscal year 2013 in the State General Fund (SGF)?
On Friday, January 20, a number of us attended the Senate Standing Assessment and Taxation Committee hearing in Topeka. It was both astonishing and obvious, from the questions that were not ask by the committee members, that they (individually or as a committee) had no real interest in considering any alternative to the Governor Sam Brownback’s tax reform proposal or plans they may have individually devoted time to crafting.
At the turn of the last century, the United States was essentially debt free. Then in 1913, we provided Congress, by constitutional amendment, the authority to tax our income. With the new taxing authority in place, federal lawmakers would no longer need our advice and consent and the march to socialism was on. It would take the better part of the next hundred years to make the million-dollar question obsolete but once government reached the billion dollar spending mark the leap to a trillion dollars occurred in a relative flash. Today, the accumulated annual deficit of the current administration alone exceeds the combined cumulative total deficit of all previous administrations. In less than a decade, we would learn to speak in billions although we really cannot comprehend the quantity.
Today, the million-dollar question equates to little more than pocket change lost in the couch cushions. Perhaps tomorrow, our children will be perplexed at our inability to comprehend such an insignificant amount as a trillion dollars.
Unfortunately, Kansas, like most other states, simply mimics the deficit spending habits and taxation policies of the federal government and now finds themselves in the dubious position of operating its own favor mill, selecting winners and losers each year for receipt of the state’s shrinking revenue — a fact easily witnessed by the parade of interest groups present and providing testimony in order to protect their share of the pie. With federal tentacles burrowed deep in their hide, our governor and state legislators lack the fortitude to make a clean break with the federal schemes of taxation.
Their plan does not mark an end to state sponsored charity but instead simply shifts state funds from one entitlement (the state earned income tax credit (EITC) for instance) to another (Medicaid) for the purpose of attracting more funds from the federal government. Drawn inextricably like a moth to a flame, our governor and legislators fail to appreciate that federal dollars are borrowed dollars that become a liability for future Kansas taxpayers. It is like paying the MasterCard bill with the Visa card. It provides only temporary relief for a chronic if not fatal problem.
The FairTaxKC Triple Zero + 6.3% plan offers the governor and state legislators the opportunity to cut the shackles and make a clean break with the federal government and from the federal schemes of taxation without cutting a single dime from their current projected expenditures.
The FairTaxKC Triple Zero + 6.3% plan would replace all current methods of taxing goods, personal and business income with a single rate consumption tax on services and new products at the Point of Sale only, with zero exceptions or exemptions.
The FairTaxKC Triple Zero + 6.3% plan would provide a prebate (prepayment) monthly to every legal citizen and resident on the registered tax rolls in Kansas for the consumption tax paid up to the poverty level.
The FairTaxKC Triple Zero + 6.3% plan projects a net positive reserve equal to roughly one third of the current SGF total planned expenditures in the first year, or $2.1 Billion, compounding annually. The governor’s tax proposal can only muster on paper about three quarters of the required statutory 7.5% general fund reserve or $350 Million.
In 1972, the total federal budget was approximately $230 billion. Today, the federal government will pay approximately $238 billion in interest payments alone this year. Historically, our state budget reflects the same trend in spending and debt (much of which is largely hidden from the public).
The only common thread in comments of the committee members and those testifying on behalf of their sacred cow was the apparent acknowledgment that significant change in Kansas tax policy was required (even if many hoped it would not affect them).
The only question remaining for us is: Will Kansas take the bold steps required that would allow the state to operate with billions of whole dollars in reserve?
Or will Kansas take a half-measured approach to modifying the federal schemes of taxation and leave the state operating on couch cushion change and a greater dependence on a bankrupt federal government?
Please take the opportunity now to contact the Governor and your legislators asking that they give the FairTaxKC Triple Zero + 6.3% plan fair treatment in their deliberations.
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