Members of the Kansas House last week either shot themselves in the foot, or didnít. Itís too early to tell.
The issue was that bill that essentially would kill the now famous/infamous Kansas income tax exemption for limited liability companies, some small corporations, the self-employed and, yes, many farmers.
If there is a genuine lightning rod for voter interest, it is probably who pays taxes and who doesnít ó and then why do I have to?
It comes out that simple.
For the last two years, as Kansas tax revenues have grown slowly and the stateís budget balance has shrunk, and now disappeared, the focus on those business tax cuts has sharpened. We all know about the 330,000 Kansans who donít pay income tax to the state while most of the rest of Kansans do, though at lower rates that were part of the LLC tax elimination legislation nobody talks about out loud.
That business tax elimination has become even more questionable as the Legislature had to raise sales taxes last year.
So, when the House demanded a vote on repealing the tax exemption of those 330,000 Kansans that we all read about but donít know by name and address, the chamber killed the bill, 74-45. So, 74 members thought the tax exemption is OK, 45 donít.
Count on every vote to become the subject of a campaign flyer or phone call or social media attack. And, the House wanted that recorded vote?
You almost have to wonder why. Republican or Democrat, thatís probably the vote that will be the most volatile of the campaign season. A vote to eliminate that tax exemption is a vote to raise taxes. A vote against reimposing the income tax on those LLCís, and you are not raising taxes. Whoís against not raising taxes?
Which is where it will be interesting this election cycle on House races. (Killing the bill in the House means the Senate didnít have to vote on it.)
Those 45 folks who voted to tax LLCís can, if they are bright, point out that many of those LLCís are small but prosperous and the owners of those tax-free enterprises live next door, down the street or around the corner, or work out at the same health club taxpayers do.
Those 74 who voted against the tax, well, weíre figuring voting ďnoĒ on raising taxes is about as far as theyíre going to want to do in explaining their votes at campaign forums or on doorsteps this summer.
There are probably districts where there is strong opposition to those LLCís not paying taxes, and there are districts where those LLC owners will help finance the campaigns and vote for House members who voted to let them retain their tax-free status.
Thatís what makes the vote interesting. Those 45 votes to re-impose taxes on LLCís included 31 Republicans, generally the party that isnít for taxing, well, about anything. Wonder what their opponents are going to have on their campaign flyers?
And, the vote against re-imposing those new taxes included half the Houseís Democrats, who generally arenít shy about taxing the rich or businesses.
Real question might be why the House would want to vote on the issue at all. If those 330,000 tax-free Kansans all lived in the same district, well, we know about helping your constituents, which is good politics. But the problem there is that unless they put ďLLCĒ on their business cards, itís hard to know which of your neighbors, or voters, are benefitting from the exemption.
Some are probably wondering why some legislator didnít think of a requirement that those LLC owners, to qualify for the tax exemption, would have to get ďLLCĒ tattooed on their necks.
Syndicated by Hawver News Co.
of Topeka, Martin Hawver is publisher of Hawverís Capitol Report.