Tax Debate Continues

Legislators have been back from their break for about two weeks. There has been a fair amount of movement in the Statehouse but final solutions remain murky. Lawmakers have been considering various tax proposals. These all bear a resemblance in that they contain 3 or 4 income tax brackets and varying rates. The LLC exemption is repealed in all the proposals. Most of the plans restore deductibility of medical expenses.

If there is a sweet spot, a plan which raises enough money to close the budget gap and is either palatable to the Governor or can garner enough votes to withstand his veto, it has yet to be tasted. This week, the Chair of the House Taxation Committee proposed everyone in the Statehouse simply pretend it’s 2012 and roll-back all of the tax reforms which passed that year. Some opponents of the Governor’s so-called March to Zero mark the 2012 tax bill as the cause of the State’s current budget woes. Others contend the matter is not that simple; that the legislature’s subsequent failure to cut spending and collapses in commodity and oil and gas markets have undercut what might have been a successful attempt to bring lower income taxes to Kansas. Unlikely to advance it that form, this proposal certainly represents a kind of pole against which all the remaining tax debate will presumably be gauged.

The House has passed a bill which lowers the sales tax on food by 1% and which impose a sales tax on a variety of services, such as, motor vehicle towing and collection agencies. This bill will raise an estimated $52 million, so it clearly just a small piece of the tax reform puzzle.

Entertainment Districts

The bill which enables cities to create special districts in which responsible adult can legally stroll down the sidewalk with a drink in their hands has passed out of the Senate Federal and State Affairs Committee and appears headed to passage in the Senate. It will head to the Governor’s desk and, it is hoped, will become law soon.