It’s the Economics, Stupid

It’s the Economics, Stupid

When a crowd was
assembling with torches and pitchforks before a board meeting, Paul McKnabb, a
professor at Emporia State University and former Emporia Board Member, used to
tell me “Democracy is a messy system and it attracts people with plenty of time
on their hands.”  Paul is no doubt
watching what is happening in Topeka right now and repeating some variation of
that wisdom.  This mess may make more
sense than it appears if we look at some data.
The Docking
Institute at Fort Hays State University released its “Kansas Speaks” survey in
Spring 2015.  The poll shows that the
legislature is doing exactly what Kansans want.   How can that be?
When Kansans
spoke, they were very clear on the subject of taxes.  The graph clearly says that Kansans prefer to
increase sales tax the most and income taxes the least.  A large bloc of Kansas Legislators and the
Governor are adamant that this is the best solution.  The will of the people is being done. But as Lee Corso likes to say, “NOT SO FAST!”
Kansans were equally
clear on the subject of who should be taxed. 
There is strong support to tax large corporations and top income
earners.  Less than 10% support
increasing taxes on the middle class and small business.  A large bloc of Kansas Legislators are
adamant that taxes on corporations and the wealthy should be increased.  The will of the people is being done.
My colleagues at
KASB make fun of me because I sometimes claim to be a trained economist.  (I taught 10th grade economics for three
semesters.) They call me Economics Professor Emeritus from Lawrence High
School.  But one doesn’t need my high
level of economic expertise to see the paradox of the “Kansas Speaks”
survey. 
Sales taxes,
especially as they are structured in Kansas, put more burden on the poor and
middle class and less on “Top Income Earners” and “Large Corporations.” Income
taxes are the fairest way to tax those two groups.  Property taxes take a larger percentage from
middle class farmers and homeowners. 
I speculate that
if you asked most Kansans to define small business, 500 employees would not be
their threshold.  In most Kansas
communities, 500 employees would constitute one of the biggest businesses in
town.  The Small Business Administration
defines a small business as 500 employees, but in Kansas 53% of all businesses
have fewer than 500 employees, and 36% have fewer than 100.
So it is no
wonder the Kansas Legislature in messy right now.  We Kansans are sending them a mixed
message.  Do we want higher sales taxes
or do we want to tax top income earners and large corporations?  Do we want to tax mom and pop businesses or
corporations?  It has never been a more
important time to consider what you think and to let legislators know. 
I’m pretty sure
that all 50 or so of my former students understand this paradox.  Maybe some of them could head up to Topeka
and help us out of this mess.