Kansas Gov. Sam Brownback held a news conference and traveled the radio circuit to make this claim: The largest tax increase in Kansas’ history, which he had just signed, was not really a tax increase at all. It was, in fact, a tax cut when viewed in a bigger picture.
I am trying very hard to make sense of what the governor is saying.
And what I think Brownback is saying is this: If you count the massive income tax cuts and small business exemptions from 2012 and add back the substantial sales and cigarette tax increases just passed, the net result is that the overall tax burden has been lightened.
Here is an analogy of the way the governor sees things:
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Let’s suppose, in 2012, a 250-pound man went on a huge diet and lost 100 pounds.
And then, in 2015, he went on a binge and gained back 75 pounds.
One could declare that this is the largest binge this man has ever experienced.
Or one can argue that the binge is not important because the man is still 25 pounds better off than he was before he dieted.
That is what the governor is maintaining. Forget the binge. He is better off.
Here is what I think is a more accurate analogy:
There were three men who went on a diet in 2012. (There was no single impact on all taxpayers but rather radically different results for different groups.)
One was a small business owner. One was a rich man. One was a middle-class man. (A fourth, the poor man, did not diet.)
Here is what happened:
The small business owner came out the best. He lost the most weight.
The rich man came off next best. He lost a lot of weight, as well.
The middle-class man, however, lost only a few pounds.
The poor man, who never participated in the diet, was neutral.
In 2015, three years later:
The small business man did not gain any weight back. He is happy.
The rich man gained back only a little weight, so he, too, is happy.
And the unfortunate middle-class man gained back more than he lost, leaving him worse off than before he dieted. He is not happy.
This analogy is fleshed out with actual facts.
In 2012, small business owners and farmers got a huge windfall by not being taxed on their profits.
The rich man was the beneficiary of tax cuts that were skewed toward the wealthy.
The middle-class man got a small income tax break.
In 2015, the substantial sales tax and cigarette tax increases hardly affected small business owners and farmers. The rich, too, were barely affected. But the middle-class man was clobbered.
Oh, and the poor received almost nothing from the 2012 income tax cuts or the small business exemptions. However, in this latest bill, the poor were spared any income taxes whatsoever. It is unclear whether for them the sales tax increase, particularly on food, will offset the income tax break.
But, no matter how you look at it, clearly, the middle-class is way worse off.
You cannot just add the tax cuts and tax increases together and subtract to find the net difference. This is very complicated because there were big winners and big losers, not at all the simplistic calculation that the governor has made.
Reach Steve Rose, longtime Johnson County columnist, at email@example.com.