• KNEA Legislative Agenda
• Legislative Issues
• Legislative Week in Review
• School Funding Central
• State Board News
• Take Action Now (LAC)
• Under the Dome Today

The Truth about Taxes & Revenue

Topics:

• Aren't taxes a bad thing? 
• Taxes - up or down?
• Who is paying taxes?
• What is the best strategy?

Aren't taxes a bad thing?

Think of what it would have meant for us if our parents and grandparents had stuck to the mantra that taxes were inherently bad -- that they knew how to spend their own money and shouldn't pay taxes. By spending their own money without taxes, we would have never seen an interstate highway system. That highway network was built both to advance the economy for all of us and to enhance our national defense, should we ever be attacked. Republicans such as Dwight Eisenhower saw the value of such a system and believed that tax dollars were well spent to create it.

The Internet is began over 40 years ago and was created and funded by our tax dollars. It grew out of national defense as well as research interests. It has come to serve business and the economy in amazing ways never envisioned by the creators of the original ARPA network.

Our nation has seen threats from war and terrorism in its history. The response to each of these threats has been the use of tax dollars to fund our defenses, provide equipment, and even create intelligence-gathering networks intended to keep us safe. Without respect to party lines, Republicans and Democrats support the use of tax dollars in defense of country.

Our government oversees the Federal Aviation Administration in order to ensure that air travel is orderly and safe. Police and fire services are funded by the tax dollars of our communities to keep our families safe.

If our parents had chosen NOT to invest in these public resources, our economy would not have prospered and industries that utilize our roads, the Internet, air travel, fire protection, etc. would not have flourished. Small- and large-businesses would all have suffered from the lack of vision to invest tax dollars in things that individually we could never have bought or built.

Most importantly, if our parents had not invested in public schools and supported taxes for higher education institutions, our opportunities for advancement would have been greatly limited. Our parents valued education and considered taxes to be an investment in the public good and in their children's future.

Taxes -- up or down?

What has happened to tax rates over the last 20 years? The answer is different for individuals, income groups, and corporations. Overall, state and local taxes as a percentage of personal income have remained relatively constant:

At the same time, corporate taxes have been cut in half (as percent of income) and taxes have increased on the lowest 20% have gone up the greatest amount to make up for cuts in other areas. For a strong economy, who pays may be just as important as "how much."

Who is paying the taxes?

One reason we all are concerned about taxes is that the poor tend to pay the highest percent of income in state and local taxes -- over twice the percent paid by the top 1% income group:

Since the lower income groups tend to spend most all of their income, it is counter-productive for the economy to charge high sales tax rates. Property taxes hit farmers and persons on fixed incomes the hardest. On the other hand, Kansas doesn't have a particularly "progressive" income tax system. And income taxes would even be deductible on Federal tax returns! Recent tax breaks for companies have sometimes had terrible results. For example, when Sykes Corporation took $6 million from Kansas and Manhattan, they didn't tell us that they would move to Latin America as soon as the tax breaks ran out.

What is the best strategy?

Some people claim that taxes hurt the economy. This has simply been proven to be false IF the revenue generated is spent on k-12 education. For tax reduction to have significant positive economic benefit, it needs to be targeted to low- and middle-income families. They spend the money in their local communities and fuel the economy. Comparable tax reductions for the wealthy have proven to be ineffectual. In fact, if tax increases are to occur, strategies such as a new top income tax bracket has the least negative economic effect. Tax cuts that result in lower funding for schools also has the immediate impact of job cuts in communities all across the state, further depressing the economies of those communities.

Tax relief is not the best strategy for economic improvement, anyway. Spending on schools has been shown by research studies to grow the economy faster than any other investment. Spending on education leads to increased employment, higher personal income, and raises people out of poverty.

Better schools produce a more skilled workforce. Businesses that utilized skilled workers pay better salaries, raising the average income and generating more tax revenue thus lowering the tax burden on everyone. Better jobs are more likely to offer health benefits and retirement plans that decrease the need for public subsidies, again lowering the tax burden. To create better schools we must provide needed resources, raise salaries to attract the best potential new teachers to the profession, lower class size, and offer the additional help needed so that every child succeeds. Investing state-wide in great public schools will spread this economic benefit to all Kansans, too.

KNEA Legislative Contacts

Blake West, President
Mark Desetti, Director, Legislative and Political Advocacy
Terry Forsyth, Director, Political Action

The KNEA Lobby Team consists of elected leaders and staff. The Lobby Team welcomes member feedback on issues before the Legislature and on this site.