Taxes in Kansas and Missouri: a shifty subject

Poor reviews for the Kansas tax cut experiment continue to roll in.

Last week, the left-leaning Center on Budget and Policy Priorities called the big-time 2013 tax cuts a mistake. Monday, the moderate Kansas Economic Progress Council said the state lagged behind six other Midwest states in population and job growth, gross state product and wages during the first year of the cuts.

The studies might provide ammunition for Democrats in the state, but it’ll take a measure of political courage we haven’t seen from them yet. Gubernatorial candidate Paul Davis has called the tax cuts reckless, for example, but still hasn’t called for their repeal.

Politics aside, though, the Kansas economic data are puzzling. Whatever you think of the wisdom of the tax cuts, putting hundreds of millions of dollars back into taxpayers’ hands should have

stimulative effect, but so far, it hasn’t happened.

Why would that be?

One explanation may have recently become apparent. Some Kansas Republicans said they’d support another $120 million or so for schools — money ordered by the state Supreme Court — only if local school districts could raise property taxes as part of their local option budget.

That request gives the game away. What’s the rationale for cutting state taxes if you just turn around and raise them locally, as many governments have? The net effect is close to zero: no extra money in the pocket, so no stimulus effect.

Perhaps this sounds familiar. Join me, as we step across the state line.

In a recent report, the rightish Tax Foundation said Missouri’s state sales taxes are quite low, ranked 37th in the nation. When local sales taxes are added in, though, the state’s sales tax burden jumps to 14th.

Of course. In the Kansas City area, we’re quite familiar with high local sales taxes, used for everything from the police and fire departments to the bus and the Truman Sports Complex.

Gov. Jay Nixon often claims Missouri is a low-tax state. But that’s largely because lawmakers have shifted the tax burden onto local governments, for schools, parks and other services.

That’s precisely the policy Kansas now pursues.

So you can see the irony. Missouri is thinking about huge tax cuts in order to be more like Kansas — at the very time Kansas is trying to be more like Missouri.

A vote to cut taxes is the easiest vote a politician will ever cast. Giving people more take-home pay is always a winner.

But cutting taxes in one place can often mean raising them in another. The new Kansas studies may show the consequences of that policy.

This story was originally published March 31, 2014 at 11:33 PM with the headline "Taxes in Kansas and Missouri: a shifty subject."