First property taxes, now sales tax on equipment

First property taxes, now sales tax on equipment

Kansas Senate doubles down on hits to farmers in effort to fill income tax elimination budget hole

Out there in the alternate universe where eliminating income taxes for lawyers, investment bankers, financial planners and doctors seemed like a great idea, the consequences are beginning to hit home in the real world.

With a budget hole approaching $1 billion to fill, the Kansas Legislature is looking for ways to find big bucks and their hungry urban eyes are falling on rural tax breaks.

POTENTIAL VICTIM: Companies like Crustbuster/SpeedKing, owned by Don Hornung shown here, stand to lose from tax law that would discourage farmers from buying new equipment or machinery,

I remember warning of this exact consequence in editorials and television appearances, pointing out that income tax is the one tax that farmers and other business have some ability to control. You know you have had a good year by November. Buying equipment or inputs for next year to spend down profits and avoid taxes is routine for most farmers.  Get hit with a 478% increase in your property tax bill and … pay up. Get hit with sales tax every time you buy machinery or equipment … pay up.

Being able to say “I told you so” is slim reward for the realization that devastation of the farm economy just might be what the Kansas Legislature thinks is a good idea. It doesn’t seem to have hit them that the gains could be short-lived. If you kill the goose, the golden eggs stop rolling in.

A press release from the Kansas Department of Agriculture today offered assurance that Gov. Sam Brownback is NOT on board with the property tax increase. The question here would be: Does the radical right legislature he bulldozed into place have the votes to override his veto? Uh, maybe.

CUTTING TAXES: Gov. Sam Brownback vows to stand by his "glide path to zero" state income taxes for many businesses.

It’s frightening that legislators don’t see the consequences of this reckless action any more than they realized that the income tax “glide path to zero” so pushed by Brownback was actually a “glide path to bankruptcy.”

Farm income and tax receipts from it have sheltered Kansas from some of the worst impacts of the Great Recession. The health of the agricultural section has kept manufacturers across Kansas cranking out equipment that farmers were eager to buy. The near-zero unemployment rate in rural Kansas has kept the state’s jobless rate brag-worthy.

Why is it that people so anxious to provide “job creation incentives” to the people who seem to have little or no interest in creating jobs are so ready to snatch business-sustaining profits from the hands of the people who have delivered to the state coffers year after year, decade after decade?

What do they hope to gain by forcing aging landowners and young farmers really edging the margins to sell their land in order to survive? What benefit is there in discouraging farmers – the most noteworthy business investors in the world – from reinvesting their profits in their farms and ranches?

It appears what they hope to gain is enough short-term revenue to prop up a widely discredited economic theory and a political ideology with not much thought to what happens after that.

And now the big question – why did the people they are scalping hand them the knife?

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