Voice For Liberty

Tag: Taxation

  • HCR 5009: An attempt to drive down property taxes

    From Representative Frank Miller

    The Kansas Legislative Research Department provided information substantiating that property taxes increased by 126 percent since 1993, yet the inflation rate adjusted for population growth increased only 43 percent! I don’t see how the appraised value of residential property could have risen 2.75 times faster than inflation adjusted for population growth! I would suggest that appraisers are encouraged to over-appraise property in order to satisfy the need for increased property taxes without increasing the mill levy. I authored this bill in the hopes of restraining appraisers from adjusting the value of your property to a value that is higher than market value. Is not the selling price of your home the only true value for “MARKET VALUE”?

    The key wording in the resolution would change the Constitution as follows: “The legislature shall provide that the appraised valuation of real property used for residential purposes which has been sold shall be adjusted to an amount equal to the average of the appraised valuation of such real property when sold determined pursuant to law and the sales price of such real property when sold.”

    The clearest way to explain what this resolution would do is to offer an example. Assume that the latest appraised value of your home is $50,000, but during the year you put your home up for sale. Let’s further assume that your asking price was $55,000, but after much time the best price you could get was only $40,000. The county appraiser would be required by this change in the constitution to reduce the appraised value to half the difference or to $45,000. Is not the closest value to true market value the price a house is sold for on the market? This change reduces, or in like manner increases, the appraised value of residential property in a fair manner and in a manner that mirrors much closer the true market value of property.

    There is nothing in the bill prohibiting appraisers from adjusting the appraised value of your home the following year. However, property owners will have a much stronger argument if the new appraised value represents an unreasonable increase, and this is at the heart of this resolution. The resolution will check the tendency to over evaluate the appraised value of residential property.

    What kind of sales does this apply to? This bill would apply to arm’s-length sales. You could not sell your house to a relative (i.e. son, wife, etc) in order to manipulate artificially the appraised value of your property. I think this bill would be very beneficial to Kansans in trying to keep the escalation of property taxes in check. Unfortunately, the resolution at this moment is stuck in the House Taxation Committee and likely will not get out of committee this year. I will be pushing this resolution again next year. Let me know what you think.

    To contact Rep. Frank Miller write, telephone, or email to P.O. Box 665, Independence, KS, 67301, Tel: (Home) 620-331-0281; Topeka office 785-296-7646, Email frank@frankmiller.org or miller@house.state.ks.us. Take a look at Frank’s updated webpage www.frankmiller.org.

  • Affording Tax Cuts, or Whose Money Is It, Anyway?

    The logic of paygo for taxes is backward, in that it starts from the assumption that all tax revenue is Washington’s in the first place and thus any tax cuts must be “offset” so Congress can be made whole. But of course the money belongs to the taxpayers who earned it, and the burden ought to be on the politicians to spend less so Americans can keep more. Republicans claim to believe this. (“Budget Irresolution,” The Wall Street Journal, March 14, 2005)

    “Paygo” refers to the “pay-as-you-go” budget rules, which require that any tax cuts be offset by other tax increases. Alternatively, we often hear politicians at all levels claim that we can’t afford tax cuts.

    If we stop and think for a moment, we should easily be able to recognize the absurdity of politicians claiming we can’t afford tax cuts. The mindset behind this is that the tax money belongs to the government in the first place, and if we are lucky enough, the politicians might cut our taxes a little, if they decide they can afford it.

    As the Wall Street Journal editorial rightly says, the money is ours to begin with! How have we descended to the level where politicians don’t understand this, that is the taxpayer that can’t afford to pay taxes, that taxes are a drain on the growth of our economy?

    Part of the answer may be found in the small book “The Law” by Frederic Bastiat. A link to an online version of it may be found on the “Other websites, resources” section of this website.

  • Let free markets determine downtown Wichita’s viability

    “Wichita’s been an east/west town for as long as I can remember. Obviously, we’re trying to change that,” says Tom Johnson, president of the upcoming downtown project, WaterWalk. (Wichita Business Journal, March 4, 2005)

    A healthy community needs a healthy downtown. … In Downtown, public investment has a proven track record of generating new, private investment. Since 1990, the government’s investment of $165 million has stimulated $248 million in private investment. (Voteyea.com website.)

    “Anything downtown seems to be off-limits for criticism or analysis. I don’t know why it is,” Lambke said. (Council member Phil Lambke, Wichita Eagle, November 14, 2004)

    If you listen to local Wichita news media, our local politicians, and various community advocates, the desirability of downtown development over other development is accepted as a given. But what people actually do with their own money is different.

    Free markets, since they represent people voluntarily entering into transactions that they believe will benefit them, lead to the most equitable and efficient allocation of scarce resources. When left to their own free will, most people and businesses in Wichita have decided to purchase property somewhere other than downtown. I don’t know why people have made this choice, and that’s really not important to me. What is important to me is that people and businesses make the choice of where to invest voluntarily. By investing in parts of town other than downtown, they are assigning a higher value to non-downtown property. As far as I know, no one is forcing this decision. People and businesses make it of their own free will.

    As it happens, some people don’t agree with the choices that most people and businesses have made. They believe that people and businesses should have purchased property downtown. They are, in effect, telling us that we have made a poor decision. They propose, and are in the process of doing just this, to trump the decisions of individuals and businesses with their own. They do this through the political process and the tax system. They take tax money and give it to businesses to induce them to locate downtown.

    Why don’t businesses voluntarily locate downtown, using their own money? There can only be one answer to this question: When spending their own money, most businesses have decided that the most productive use of it is to invest it somewhere other than downtown Wichita.

    It is adding insult to injury when we realize that the tax money given away comes largely from people who have voted — with their own dollars — not to do what these tax dollars are used to promote. It is a further blow when we realize that the money given to downtown businesses in the form of incentives makes our town poorer as a whole. Why is that? It’s because that most people and businesses, when exercising their own best judgment, have decided that investing in downtown Wichita is not the most productive use of their resources. When the government, using its power to tax, makes a different decision for us, resources are not allocated as efficiently and productively. Therefore, we are poorer.

    The result of all this is that we have the spectacle of the people of Wichita, voting with their own dollars, making one choice. Then the politicians and various quasi-public organizations say, “No, citizens of Wichita, you are wrong,” and impose their will on the people of Wichita through their power to tax. How arrogant is that?

  • Rep. Loganbill Advocates More Tax Brackets

    On Saturday February 12, 2005, I attended a meeting of the South-Central Kansas Legislative Delegation. State Representative Judith Loganbill made remarks that included the fact that the maximum Kansas individual income tax rate becomes effective at taxable incomes of $30,000 for singles and $60,000 for married couples. A member of the audience spoke and expressed astonishment to learn this. I didn’t think about it at the time, but I now realize that Rep. Loganbill was advocating more tax brackets with higher rates.

  • TABOR: not fair?

    Mr. Gary Brunk, executive director of Kansas Action for Children, wrote a letter published in The Wichita Eagle on February 23, 2005, opposing a taxpayer bill of rights, or TABOR, in Kansas. As evidence of TABOR’s failure in Colorado, he cites the low rate of childhood immunization in that state.

    It is unfortunate that so many Colorado children don’t receive immunizations. Mr. Brunk, however, presents no evidence that Colorado’s TABOR is the cause. It is tempting to conclude that when both x and y are present that x must be the cause of y, but this is not evidence of actual causation. It is possible that other factors are responsible.

    Besides, we might ask this question: Why should the taxpayers of Colorado pay to immunize others’ children? I think the answer many might give is that if the state supplies relatively inexpensive immunizations, the state can avoid paying the substantial healthcare costs for children who become ill with diseases the immunizations prevent.

    This is undeniably true, and leads to the even-larger question: Why have states become responsible for providing healthcare (and other services) for so many? Mr. Brunk makes a case for what he terms a “fair” tax system. I submit that a tax system that takes money from one group of people and gives it to another group to whom it does not belong, no matter how noble the intent, is not in any sense fair. That is, if by fair Mr. Brunk means moral.

    The economist Walter E. Williams makes the case succinctly: “Can a moral case be made for taking the rightful property of one American and giving it to another to whom it does not belong? I think not. That’s why socialism is evil. It uses evil means (coercion) to achieve what are seen as good ends (helping people). We might also note that an act that is inherently evil does not become moral simply because there’s a majority consensus.”

    It is the runaway growth in taxes and spending — the taking of one person’s property and giving it to another — that a TABOR seeks to stem. A TABOR does not tell legislators how they must allocate state funds; it merely places a limit on how much they can spend. Legislators can still make judgments each year as to which programs are most important. Spending will most likely keep growing, but slower than it has.

    The forces that want to increase taxes and spending by increasing amounts are always working and must be restrained. For example, Mr. Brunk, in his letter, advocates legislation that will require “a biannual report on the proportion of their income that people in different income levels pay in taxes.” Reading this, I get the strong impression that Mr. Brunk believes we do not pay enough tax. But for those who believe that state government is already large enough, a TABOR is the best way to manage its growth.

  • Latest Federal School Finance Spending Revealed

    Here is an article from the Kansas Taxpayers Network that reports on school spending: http://www.kansastaxpayers.com/editorial_fedschool.html.

    On Saturday February 12, 2005 I attended a meeting of the South Central Kansas Legislative Delegation. Lynn Rogers, USD 259 School Board President, and Connie Dietz, Vice-President of the same body, attended. There has been a proposal to spend an additional $415 million over the next three years on schools. Asked if this would be enough to meet their needs, the Wichita school board members replied, “No.”

  • Increase our awareness of taxes

    As the annual tax season is upon us, we should take a moment to examine our level of awareness of the taxes we pay.

    First, very many families don’t pay any federal income tax. According to a study by the Tax Foundation (link: http://www.taxfoundation.org/ff/zerotaxfilers.html) 58 million households, representing some 122 million people or 44 percent of the U.S. population, pay no federal income tax.

    For those who do pay taxes, they often aren’t aware, on a continual basis, of just how much tax they pay. That’s because our taxes are conveniently withheld for us on our paychecks. Many people, I suspect, look at the bottom line — the amount they receive as a check or automatic bank deposit — and don’t really take notice of the taxes that were withheld. This makes paying taxes almost painless.

    An alternative would be to eliminate the withholding of taxes from paychecks, and from monthly mortgage payments, too. Instead, each month or year the various taxing governments would send a bill to each taxpayer, and they would pay it just like the rest of their periodic bills. In this way, we would all be acutely aware of just how much tax we pay. I’m aware there is an obvious collection problem.

    A further perversion is that many people are happy during tax season, because they get a refund. And they’re delighted to get that refund, so much so that many will pay high interest rates on a refund anticipation loan just to get the money a little earlier. The irony is that by adjusting their withholding, they could take possession of much of that money during the year as they earn it.

    The other people happy during tax season are tax preparers. As a country we spend an enormous effort on tax recordkeeping and compliance. Another study by the Tax Foundation estimates that in 2002 we spent, as a nation, 5.8 billion hours and $194 billion complying with the federal tax code. (5.8 billion hours is equivalent to about 2,800,000 people working 40 hours per week, 52 weeks per year.) By simplifying our tax code, we could eliminate much of this effort, and return that effort to productive use.

    Since tax withholding from paychecks and mortgages reduces our awareness of just how much tax we pay, it’s unlikely that governments will stop withholding and submit a bill to taxpayers. It’s left to ourselves to remain aware of how much we are paying.

  • Abuse Of Tax Funds Must Stop

    The following is from the Kansas Taxpayers Network. It shows how government-funded organizations participated in the campaign to increase Sedgwick County taxes.

    Taxpayers’ funds are being used to promote higher taxes in Kansas. Tax funds are also being used to lobby for higher taxes (see VI. and 1. above). This is an egregious mess that the legislature should stop. Tax funds are also used for “informational” campaigns by taxpayer funded groups. This includes a variety of local units like school boards but is not limited to any local units.

    How bad is this problem? Public campaign donation and expense records show that $45,907.85 was contributed to the “Vote Yea” committee from organizations that are partially or fully funded by tax funds. Here’s how the money is broken down in this advisory election:

    1) Greater Wichita Convention and Visitors Bureau contributed $10,000. The Greater Wichita Convention and Visitors Bureau is almost entirely funded by the City of Wichita through its hotel/motel bed tax. In 2004 budgeted expenditures were $1,122,510.

    2) Greater Wichita Sport Commission contributed $25,000. The Sports Commission operates out of the Convention and Visitors Bureau offices. City, county, and state tax funds in the form of $5,000 a year memberships finance this office. The state funds pay for Wichita State University’s membership.

    3) Wichita Downtown Development Corporation contributed $2,324. This city sponsored organization for helping downtown is primarily funded with a four mill city property tax within its downtown area boundaries.

    4) Kansas Turnpike Authority contributed $3,583.85. This contribution by a state organization listed an “Inkind” contribution of a “loaned executive,” for the “vote yea” campaign.

    5) The Hyatt Regency Wichita contributed $5,000. The Hyatt Regency operates this city owned and money losing hotel adjacent to the Wichita Century II complex. Since this corporation has a contract to operate this hotel this is another city related and funded contribution, albeit through this back door donation.

    These five contributions were more than twice the entire amount of the vote no campaign that spent just over $21,000 in their unsuccessful effort to defeat this advisory proposal. This spending does not include $5,000 more in 5016 funds for the tax hike campaign. Similar charitable donations in tax elections have also been reported in northeast Kansas. All these tax and 5016 expenditures should cease. However, these contributions and expenditures were probably a good deal less than the money spent by tax funded organizations to lobby the legislature. Some of these local units register as lobbyists (see lobbyist list for cities, counties, schools, and other entities) and some do not, like lobbyists for Regents Institutions.

    Tax funds are being misused to litigate for higher taxes. School districts that spend tax funds to sue the state over school finance are biting the hand that feeds them and already provides the bulk of their entire budgets. The state school finance formula should have an adjustment to penalize school districts that are suing the state over school finance. The perpetual school litigation machinery needs to be turned off at the statehouse.

  • Letter to Kansas Legislators regarding Sedgwick County arena tax

    January 25, 2005

    Dear Senator or Representative:

    I am writing to express my opposition to the legislature granting Sedgwick County the authority to raise its county-wide sales tax in order to fund the proposed downtown Wichita arena.

    I realize that the voters in Sedgwick County voted for the tax. Still, I believe there is ample reason why you should vote against the tax.

    The primary reason is that the idea of the arena came about so fast in the summer that there was little thought given to the underlying issues. The Center for Economic Development and Business Research at Wichita State University produced a study showing a large positive economic impact for a downtown arena. I found much academic research that showed otherwise, that taxpayer-funded facilities such as the proposed downtown Wichita arena rarely live up to their expectations, and instead become a burden on the taxpayers. I also uncovered the fact that the WSU study was flawed in that it omitted important factors such as depreciation, the accounting for which is now required by Government Accounting Standards Board Statement 34. Incredibly, the CEDBR at WSU was not aware of this requirement when they prepared the study that was used to promote the economic benefit of the proposed arena. They admitted this when I called it to their attention.

    Thus, what is presented as an economic boon for all the people instead becomes the county as a whole subsidizing the interests of a few.

    I presented my findings to many news outlets in Wichita, but there was little interest. Because I experienced such resistance to my message I started a website, the “Voice for Liberty in Wichita.” It is located at wichitaliberty.org. Much of the research I uncovered is posted there. As an example I am enclosing an article that I recently wrote. It is based on what was found to happen in Pulaski County, Arkansas (Little Rock), when they built an arena funded in part by taxpayers.

    I would be happy to provide you with any additional information that I can.

    Thanking you in advance for your time,

    Bob Weeks