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Oh No! Kansas Legislators Have To Raise Taxes

But will they repeal that Koch loophole or pass it all on to the poor folk?
Oh No! Kansas Legislators Have To Raise Taxes
Image from: DonkeyHotey

Kansas is in such dire straits that legislators are actually considering a tax increase, though what kind of tax increase is the source of deep conflict.

Here's the thing. The legislature could fix Kansas' revenue problems with one simple repeal of one simple tax cut: The Koch exemption. And they really, really do not want to go there. Biting the hand that elected them seems like a bad idea to them, especially after they sold it with such dishonest framing.

The provision is question has been framed as the "small business exception." It eliminates all taxes on non-wage income to Subchapter S corporations. Now we all know who benefits from that, don't we?

The Kochs private ownership of a global conglomerate is concentrated inside the umbrella of a Subchapter S corporation, which passes through all the profits from their various business ventures to the four individuals with a stake in that company. That means all the profits fall into Charles and David Koch's hands free of any taxes. Wasn't that helpful of them?

When that law passed, it created a bonanza for all sorts of so-called small businesses and a tax haven inside the United States for every consulting company and personal service corporation to incorporate and take advantage of the gold rush. According to the New York Times, "333,000 filers took advantage of the exemption at a cost of $206.8 million." That's in one year.

That magnificent experiment in oligarchy is failing. The only question now is whether they'll raise taxes, kill more programs, raise sales taxes, or shut down the government. You can bet the Kochs are pushing hard for their preferred outcome, which can be summarized as "screw the poor, tax the poor, or shut them down, but don't expect me to give you anything.

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