GREAT BEND, Kan. - Often times during a recession, middle class feel a raise in their taxes while multi billion dollar companies receive tax breaks. While CEO's still make million dollar bonuses. This is why Kansas must and most likely will, give a huge tax exemption to the TransCanada Pipeline. Approximately 8.5 million a year property tax exemption for ten years. In addition to the property tax exemption it has also been reported, but not confirmed that the pipeline company has signed with the Kansas Department of Commerce for 55 million in tax credits.
Of course the above statement was satire. Unfortunately the information is true. A day does not go by when Kansans do not hear about the budget shortfall. The idea of a sales tax increase has been thrown around Topeka to raise funds for the state. Not much seems to be going on to close tax loopholes. TransCanada Pipeline is benefiting from a major tax loophole in Kansas. A loophole the average middle class worker will make up in their taxes.
The pipeline passes through several states, Kansas being one. The pipeline must go through Kansas to reach its final destination in Texas. If it weren't for this major tax loophole, TransCanada would have no choice but to pay the property tax, and forfeit all tax credits. Kansas is the only state in the region giving such gracious benefits to this particular pipeline.
It should be common sense business practice not to give away money, and special benefits when a budget is in the red. Unfortunately, this business practice is exactly why Kansas is suffering from a budget deficit. Unfortunately, instead of updating tax loopholes, and closing them, the middle class is asked to toss in cash to make up the difference. In a sense, tax paying individuals are donating money to oil companies. Maybe not directly, but individual taxpayers are asked to make up the difference when the state budget is at a shortfall.
I was not aware of this hugh tax break. Perhaps it was originally enacted as a way to induce the company to situate its pipeline in Kansas as opposed to a neighboring state. Although it seems logical that a pipeline to Texas would have to come through Kansas anyway. You're right on the money when you note that a big problem with our state budget is the plethora of exemptions.