TAXES

"The American Republic will endure until politicians realize they can bribe the people with their own money." – Alexis de Tocqueville

TAXPAYER BILL OF RIGHTS

The House recently considered a proposed constitutional amendment that would limit increases in government spending to the rate of inflation and population growth. If tax revenues exceeded the spending limits set forth in the amendment, a portion of those revenues would go to emergency and rainy day funds and the remainder of the surplus would be rebated to Kansas taxpayers. Any efforts by the legislature to increase taxes or debt would have to receive majority approval of the voters statewide.

For this resolution to pass, it is necessary that it obtain a two-thirds majority in both the House and Senate, and it then would have been placed on the November ballot for voter approval by a simple majority. Those who responded to my prior legislative survey overwhelming supported this concept, as did I. Unfortunately, TABOR failed to receive the necessary two-third's majority necessary to pass the House. Every Democrat voted against it, as did about half of all Johnson County Republicans. As one of its sponsors, I proudly supported the Taxpayer Bill of Rights, and hope future Legislative efforts will prove more successful.

The key attributes of the Taxpayer Bill of Rights, or "TABOR" as it is commonly known nationwide, are as follows:

1. Limit state government spending growth so that it does not exceed the rate of inflation, as adjusted for population changes;

2. Require voter approval for tax and fee increases;

3. Establish a three percent emergency reserve fund and up to a ten percent budget stabilization reserve fund; and

4. Certain excess tax receipts that are in excess of the approved amounts will be refunded to the taxpayers.

Supporters of the amendment argue that state taxes grew an average of 4.11 percent in the last decade and Kansans' average annual income grew only 2.99 percent during that same period. Supporters also argue that states with spending caps had the strongest economies in the 1990s and did not experience significant budget shortfalls or cuts in areas like public education during the national economic downturn of the last three years.

Proponents of the amendment further argue that funding government should be no different than the financial realities that Kansas families live with. They have to adjust their budgets to live within their means. Those in favor also site that in just the past ten years, the state all funds budget has increased over 50%. States like Colorado have experienced great economic growth do to similar amendments in their state constitutions.

Opponents of the measure claim that you cannot predict what type of needs the state will need in the future. They claim the responsible thing to do is not to tie government’s hands with such an amendment. Instead, legislators would be able to determine the appropriate amount of money to spend on government each year.

As you can see in the inset graph, over the last 30 years, Kansas spending has increased 1,119%, while Kansas wages increase only 348% during the same period. Government spending is growing three times faster than Kansas wages. This is a bipartisan failure. Democrats and Republicans have both governed over this unsustainable and embarrassing spending spree. When families and businesses spend more than they make, they go bankrupt.

Significant budget shortfalls now confront most states after more than a decade of uncontrolled spending growth. Had increases in spending been limited to the rate of increase in inflation and population, states would have saved $93 billion -- twice the size of today's state budget deficits.

Many policy makers nationwide have recently expressed interest in adopting constitutional tax and expenditure limitations (TELs). Originally, TELs were devised under Governor Ronald Reagan in 1972, after enduring a decade where state government spending grew by 160 percent, dwarfing both the combined increases in population and inflation as well as personal income growth. Though improvements have since been made to such policies, many of the key features of TELs remain the same: Annual increases in expenditures should be limited to the growth in inflation and population. Tax revenues that are in excess of allowable expenditures must be refunded to the people as soon as possible.

A Taxpayer Bill of Rights would place strong constraints on the future growth rate of state spending. And it would provide Kansas an automatic refund when tax collections exceed the TABOR limit. It requires voter approval for tax increases, and it limits state revenue growth to the rate of population growth plus inflation. Tax collections over the limit must be refunded back to the taxpayers. Taxpayers can override the limits by popular vote.

Another 30 years of the same failed approach would be catastrophic. Education, transportation, welfare, etc., all depend on us not bankrupting the state by spending above our means. If we fail to act, the poor, the disabled, children’s education, and all other government services will be radically impacted as the state slips into a long-term, irreversible economic decline.

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STREAMLINED SALES TAX

During the 2003 Legislative Session, the Governor successfully pushed through the Legislature the Streamline Sales Tax, which requires merchants to pay the sales tax rate of the taxing jurisdiction where their goods are delivered.  This destination style tax was put into effect with the purpose of forcing Internet companies to pay sales tax when delivering goods in Kansas.

I was one of only a very small minority of Representatives to consistently oppose the so-called "Streamlined Sales Tax". 

Although streamline sales tax was passed with good intentions, it unfortunately had unintended consequences.  The problem arises when merchants try to figure out what the tax rate is for a specific location.  Kansas has 751 taxing jurisdictions, and the tax rate can change drastically when you go from the county to a city. 

As a result, the streamline tax has had an overwhelmingly adverse impact on small business.  They have difficulty putting an accounting system in place that can adequately calculate the sales tax.  It also costs businesses by having them spend numerous hours a week filling out and sending in tax forms to the Department of Revenue. 

Additionally, some municipalities lose revenue due to the destination tax because often times industrial parks are located outside of town.  Before the streamline tax was in place, the city where the goods were bought would be able to receive a portion of the sales tax.  Due to this discrepancy, sales tax has essentially become negotiable.   Buyers can deal with the merchants for the sales tax by requiring the merchant to ship the goods to a lower sales tax jurisdiction.

To attempt to correct these problems - or at least ameliorate their many negative consequences - the House passed House Bill 2599 by a vote of 95 to 29 on Wednesday, March 9, 2004.  This measure postpones the implementation of the streamline sales tax until Congress passes legislation requiring states to enact such a tax. 

Those voting in favor of HB 2599 did so to help small businesses to deal with the difficulty of implementing streamline sales tax.  They did not believe the amount of funds the state would receive from the tax would ever justify the cost of collecting it. 

Not everyone saw it that way.  Proponents of streamline sales tax do not feel that Kansas should place a moratorium on the taxes implementation, because the state would lose tax revenue it could receive from internet.  Several jurisdictions, most of which do not have large retail merchants, make money from a destination based sales tax.  Those areas don't want to give up the revenue, and they see businesses' problems as being surmountable. 

House Bill 2599 now heads over to the Senate to face an uncertain fate.  Earlier this year the Senate voted on different measures that would kill the streamline sales tax, place a moratorium on the tax, and that would make it so that small businesses would not have to comply with the collection of the tax.  All of these measures failed. 

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TAX ISSUES

Some of my colleagues in the House and Senate have stated publicly that it will take courage to raise taxes significantly and thereby provide the increased funding for the multitude of government programs people crave.  Rest assured, my friends, doing so would not require courage, but rather a lack of principle married to a contempt for the Kansas taxpayer – the Kansas worker, the Kansas business, the Kansas family.  Given the economic downturn over the past few years, along with the continued decline in Kansas' population, a tax-increase would be both unsupportable and unconscionable.  Below you will find a grid listing House members' votes on tax-related matters during the 2003 Legislative Session.  As you will see, my voting record shows that I have one of the most anti-tax voting record in the House.

REDISTRIBUTION OF WEALTH -- "[Liberals] raise taxes. It's their way of paying for programs that buy votes from people who don't pay high taxes." – Pete Waldmeir

"STEALTH" TAX INCREASES -- "Everyone knows the story about the frog. Drop him into a pot of boiling water and he will jump right out again, relatively unscathed.  But put the same frog into a pot of cool water and slowly turn up the heat, and he will soon find himself cooked." – Bruce Bartlett on taxes.

BUREAUCRACY -- "...[T]he trick to achieving funding immortality is, first, to get the country used to paying.  In politics, the customary is indistinguishable from the reasonable." – Fred Reed

  Rep. Carter is one of the most "anti-tax" Legislators in the House of Representatives

Representative	Party-District	Lifetime Score
Kauffman, Mary	R-101	97.2
Huy, Bonnie	R-87	95.6
Long-Mast, P.	R-76	95.5
Carter, Eric	R-48	92.5
Huebert, Steve	R-90	92.2
Landwehr, Brenda	R-91	90.7
Brunk, Steven	R-85	90
Goering, Jeff	R-105	90
Goico, Mario	R-100	90
Siegfried, Arlen	R-15	90
Schwab, Scott	R-49	88.8
Miller, Frank	R-12	87.8
McLeland, Joe	R-94	87.2
Faber, John	R-120	86.1
McCreary, Bill	R-80	85.2
Burgess, Mike	R-51	85
Ostmeyer, Ralph	R-118	84.8
Williams, Dan	R-14	84.8
Osborne, Vern	R-61	84.2
Howell, Andrew	R-4	84.1
DeCastro, Willa	R-96	83.3
Novascone, Todd	R-99	83.3
Ballou, John	R-43	79.2
Edmonds, John	R-112	78.9
Mays, Doug	R-54	78.3
Vickrey, Jene	R-6	78.2
Hutchins, Becky	R-50	78.1
Dahl, Donald	R-70	77.9
Merrick, Ray	R-27	77.7
Myers, Don	R-82	76.7
Johnson, Everett	R-77	76.6
Powell, Larry	R-117	76
Mason, William	R-75	73.6
Morrison, Jim	R-121	72.7
Gordon, Lana	R-52	70.6
Tafanelli, Lee	R-47	69
Neufeld, Melvin	R-115	68
Holmes, Carl	R-125	67.9
Humerickhouse, Joe	R-59	65.5
Compton, Mary	R-13	64.2
Morrison, Judy	R-23	63.5
Aurand, Clay	R-109	63.4
Shultz, Clark	R-73	62.9
Wilson, R.J.	D-3	62.4
Barbieri-Lightner, P.	R-29	62.1
Schwartz, Sharon	R-106	61.5
Powers, Ted	R-81	60.6
Freeborn, Joann	R-107	60.2
Hayzlett, Gary	R-122	59.9
Pottorff, Jo Ann	R-83	59.4
Wilk, Kenny	R-42	58
Burroughs, Tom	D-33	56.4
Johnson, Dan	R-110	55.5
Winn, Valdenia	D-34	52.9
Swenson, Dale	R-97	52.1
Campbell, Larry	R-26	51.1
Decker, Kathe	R-64	51
Sharp, Bonnie	D-31	49.3
O'Neal, Michael	R-104	48.1
Horst, Deena	R-69	46.9
Kuether, Annie	D-55	45
Beggs, Carol	R-71	44.9
Klein, Thomas	D-103	44.3
Henderson, Broderick	D-35	44.1
Newton, Dean	R-21	43.5
Huff, David	R-30	43.3
Crow, Marti	D-41	42.9
Pauls, Janice	D-102	42.6
Long, Margaret	D-36	41.8
Bethell, Bob	R-113	41.5
Thimesch, Daniel	D-93	41.2
Flora, Vaughn	D-57	40
Gatewood, Doug	D-1	39.8
Ruff, Candy	D-40	39.4
Dreher, Stanley	R-9	37.9
Dillmore, Nile	D-92	37
Sloan, Tom	R-45	37
Cox, Ray	R-39	36.9
Grant, Robert	D-2	36.9
Toelkes, Roger	D-53	36.8
Rehorn, Rick	D-32	36.7
Feuerborn, Bill	D-5	36
Patterson, Doug	R-28	35.8
Gilbert, Ruby	D-89	35.6
Williams, Jerry	D-8	35
Phelps, Eber	D-111	34.9
Light, Bill	R-124	34.1
Owens, Tim	R-19	33.2
Krehbiel, Carl	R-74	32
Ballard, Barbara	D-44	31.8
Kirk, Nancy	D-56	31.4
Showalter, Judy	D-78	31.3
Reitz, Roger	R-67	30
Reardon, Bill	D-37	29.6
Shriver, Joe	D-79	29.5
Henry, Gerald	D-63	28.6
Loganbill, Judith	D-86	27.8
Craft, Barbara	R-65	27.5
Storm, Sue	D-22	27.5
Yoder, Kevin	R-20	27.5
Larkin, Bruce	D-62	26.8
McKinney, Dennis	D-116	26.7
O'Malley, Edward	R-24	26.5
Flaharty, Geraldine	D-98	26.3
Minor, Melvin	D-114	25.9
Loyd, Ward	R-123	25.7
Jack, Jeff	R-7	25
Yonally, Jim	R-16	25

Boyer, Rob	R-38	22.5
Kassebaum, William	R-68	22.5
Sharp, Stephanie	R-17	22.5
Thull, Tom	D-72	22.5
Sawyer, Tom	D-95	21
Hill, Don	R-60	20
Huntington, Terrie	R-25	20
Miller, James	D-11	17.5
Neighbor, Cindy	R-18	17.5
Ward, Jim	D-88	17.5
Davis, Paul	D-46	15.4
Lane, Harold	D-58	15
Carlin, Sydney	D-66	12.5
Holland, Thomas	D-10	7.9
Faust-Goudeau	D-84	5
Scoggins-Waite	D-119	5
Svaty, Joshua	D-108	5

\For informational purposes, here are the Kansas Senate's scores, listed alphabetically by Senator's last name:

 

Adkins, David	R-7	32.5
Allen, Barbara	R-8	29.5
Barnett, Jim	R-17	21.4
Barone, Jim	D-13	28.9
Betts, Don	D-29	27.8
Brownlee, Karin	R-23	72.4
Brungardt, Pete	R-24	11.3
Buhler, Mark	R-2	3.9
Bunten, Bill	R-20	52.9
Clark, Stan	R-40	76.8
Corbin, Dave	R-16	41.6
Donovan, Les	R-27	59.3
Downey, Christine	D-31	16.7
Emler, Jay	R-35	22.5
Gilstrap, Mark	D-5	49.9
Goodwin, Greta	D-32
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