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This Is the State That Jack Built

By Ethel Peterson
Advocacy | April 20, 2011

DODGE CITY, Kan. - Do you remember the nursery rhyme of your childhood: "This is the house that Jack built?" It went on to explain how everything was all connected and caused the next step to happen, closing with the final phrase, "This is the dog that bit the cat that chased the mouse that ate the cheese that lay in the house that Jack built."

Well, I guess that almost explains how our house in Kansas got built (the Kansas House of Representatives, that is).

If you read No Requiem for the Useless earlier this week, you know my view of how the Federal Reserve segment of our national structure operates to manipulate the financial management of this country. As the nursery rhyme suggests, there is a next step; the corporations take the dollars so generously given by taxpayers by making sure they don't lose the companies don't lose those through taxes. So, "This is the corporation that pays no income tax to the federal government." Fill in almost any name here -- like GE who didn't pay any income tax last year on its $14 billion profit and yet filed for a $3.2 rebate.

Here I must mention that on March 1st this year, the Republicans in the U.S. House of Representatives voted to cut $600 million from the IRS budget for the remainder of 2011, and more in 2012. They, of course, want to cut IRS expenses. Never mind that for every dollar spent by the IRS for audits, liens, and seizing property from tax cheats, we get ten dollars. That's a pretty good rate of return, I think. But it also means corporations have to spend more to hide corporate cheating.

Of course, we are still talking about the federal level. At least one corporation in Kansas follows the guideline from the Feds and pays no income tax either. It's named Boeing. Boeing got a contract from the federal government recently amounting to $35 billion dollars to build airplane tankers for refueling, etc.

We were glad in Kansas because that meant many jobs in south central Kansas. That also meant good pay for good jobs, so workers could pay income tax in Kansas. Workers could afford to buy things. That meant sales tax revenue in Kansas. The workers could buy homes, so there was property tax.

Hooray for Boeing! Hooray for Kansas! But, woops. Boeing didn't pay any corporation income tax to the U.S. government last year, or the year before that, or the year before that one, either.

Boeing has 38 subsidiary plants overseas, providing jobs abroad, mostly in tax-free situations. Now we understand taxes and corporations in Kansas.

At this point, we are ready for the next part of, "This is the state that Jack built." In Kansas, we now know about how evil income taxes are for corporations. Naturally, we can count on our state legislators to fix things. So, in February of 2011, Representative Gene Suellentrop of District 102 introduced a bill in the Kansas House of Representatives to phase out the Kansas corporate income tax over a five year period. The bill is numbered HB 2156, and has 29 co-sponsors (all Republicans). It is titled: Five-year phase out of income tax on corporations.

The bill was introduced and referred to the Committee on Taxation. It never left that committee, so it remains for consideration next year in the 2012 session. Initially, it had to go to the Director of the Budget for a study and preparation of a fiscal note (what it would cost to implement the law if it were to pass).

The fiscal note states the following, "Based on current law, corporate income tax is calculated by combining the normal tax rate of 4.0 percent of Kansas taxable income and a surtax rate of 3.05 percent of Kansas taxable income for income above $50,000. The bill would reduce these tax rates by 20.0 percent for each tax year beginning in tax year 2011 until the tax would be eliminated in tax year 2015."

This means the estimated reduction in the State General Fund would be $70,580.000
in Fiscal Year 2012. In FY 2013, it would be $132,830,000 less. In FY2014, a total of $210,110.000. In FY 2015, $275,900,000. And in FY 2016, the total reduction in state income would be $334,260,000. So in each year thereafter, Kansas would have over 334 million dollars less in the state treasury.

In the meantime, you and I have heard over and over just how broke we are. Our state has no money. We will need to cut hundreds of dollars per pupil in education aid. We will need to cut 2.9 million dollars from the senior care program. We're told that must diminish the Meals on Wheels program by $300,000. Older folks just can't expect to be fed by the state even partially, you know. We must close homes for the severely disabled and do away with mental health facilities and allow countless folks to become homeless.

Yep, this is the state that Jack built.

It started when we decided unbridled greed would allow us to stuff money into the Federal Reserve Bank and then never oversee it or demand accounting.

It progressed when our Supreme Court ruled that corporations have all the rights of people (and more).

And now our own state legislators want to pull the final irony on us, and say that our state won't even charge any income tax on these businesses.

In a comment on one article, the question was asked, "What can we do about it?" I would suggest that we ask these 29 State Representatives about their rationale for supporting such a bill while they are home from Topeka.

I'm betting they will try to tell us that lowering taxes and reducing state services helps create jobs. They'll say that because the money from corporations is already taxed by the payment of income tax by the owner and its workers. But they don't feel that way when they ask for tax abatement or special exemptions or loopholes.

Furthermore, I'll also predict that over half of those lawmakers own or share in ownership of a business that benefits from this bill that they are cosponsoring. If you are interested in knowing who the other 28 cosponsors are, see the list below.

Remember, democracy only works if we make it work. I'd like to think that the Kansas House isn't the one that Jack built, but one that WE are building together. Let's give it a try.

Editor's Note: Ethel has provided such a great community service through her citizen journalism here. It's important for citizens to keep one another informed about what our legislators in Topeka and Washington are doing. We've decided to append her article with a full list of the lawmakers who have co-sponsored the bill to phase out income tax on corporations in Kansas.

Sponsors of Kansas HB 2156:

  • Representative Gene Suellentrop, Business Owner (R - District 105)
  • Representative Anthony Brown, Carpenter (R - District 38)
  • Representative Steve Brunk, Real Estate and Business Broker (R - District 85)
  • Representative Dave Crum, Own Optometry Business (R - District 77)
  • Representative Pete DeGraaf, President of Financial Consulting Company (R - District 81)
  • Representative Jim Denning, CEO for Discover Vision Centers (R - District 19)
  • Representative Mario Goico, Business Owner (R - District 100)
  • Representative John Grange, President and Owner of Plumbing Company (R - District 75)
  • Representative Gary Hayzlett, Business Owner (R - District 122)
  • Representative Dennis Hedke, Owner of Hedke-Saenger Geo-science, a Private Consulting Company (R - District 99)
  • Representative Phil Hermanson, Realtor and Business Executive (R - District 96)
  • Representative Kyle Hoffman, Business Owner (R - District 116)
  • Representative Steve Huebert, Engineer at Boeing (R - District 90)
  • Representative Kasha Kelley, Co-Owner and CEO of First Intermark and Customer Retention Company (R - District 79)
  • Representative Lance Kinzer, Attorney and Owner of Private Company (R - District 14)
  • Representative Marvin Kleeb, Owner and CEO of American Government Solutions, a for-profit company (R - District 48)
  • Representative Brenda Landwehr, LT Care Solutions, Inc., a private company (R - District 19)
  • Representative Peggy Mast, employed at Design Rite Contracting, married to John who owns and operates a private engineering company (R - District 76)
  • Representative Joe McLeland, retired network analyst (R - District 94)
  • Representative Robert Montgomery, owner of Robert Montgomery Homes, a custom home-building company (R - District 26)
  • Representative Mike O'Neal, Speaker of the House, private attorney at the firm Gilliland & Hayes P.A. (R - District 104)
  • Representative Leslie Osterman, claims researcher (R - District 97)
  • Representative Virgil Peck, Insurance Agent (R - District 11)
  • Representative Larry Powell, Ranch Owner (R - District 117)
  • Representative Marc Rhoades, College Instructor (R - District 72)
  • Representative Joseph Scapa, Realtor (R - District 87)
  • Representative Joe Seiwert, retired business man (R - District 101)
  • Representative Jene Vickrey, owner of carpet laying company (R - District 6)
  • Representative Brian Weber, business owner (R - District 119)

1 Comment

Ethel--Thanks for applying your knowledge and expertise to this issue. And thanks for the editor for the revealing list. It should open some eyes and make people upset enough to take action, but I doubt if it will. The mainstream media sure won't cover it. And corporate CEOs have hired PR people to spread the word that corporations are benevolent job creators. Anyone who pays the least bit attention to news on the economy should know that most of the jobs are being created in other countries where workers get paid almost nothing and environmental and safety considerations are non-existent.

These blogs are on Facebook and I often share the ones I think my friends list should see. This is definitely one of those.


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