Rep. Mah:

I have heard that you made some derogatory comments about Kansas Taxpayers Network and myself on Jim Cates radio program yesterday. I look forward to a public debate on Kansas fiscal issues with you to correct the left-wing misinformation you are spreading.

I would be interested in your source for your assertion that HB 2247 contained a $400 million increase in taxes. I heard many descriptions of this bill during the regular session but I did not see any Legislative Research or other analysis that contained this information at that time. Ooops, in re-reading your post you prefaced this with the word "..potential..," well the KTN vote rating likes to deal with specifics, like the votes to raise income and sales taxes in 2004 passed the Kansas house with EVERY house Democrat voting for it. Sadly, many fiscally liberal Republicans joined in passing that bill out of the house, like Bill Kassebaum, Cindy Neighbor, Stan Dreher, Mary Compton, and others you didn't get a chance to meet because they did not return to the 2005 legislature.

Like I said in my previous post the SB 3 legislation was much more important in school finance than HB 2247.

You should be aware that most of the recorded votes cast on bills during final action are often unanimous or close to unanimous with a member or two missing due to health or other excused absences. I find it odd that you would want KTN to include bills on modifying insurance statutes, grain elevator regulations, the color of lights in emergency vehicles or recorded votes on similar legislation for KTN's vote rating. Have you extended your critique of KTN's vote rating to the other organizations, like the teachers unions (KNEA) or Kansas chamber (KCCI) which also use a much smaller number of votes than the 457 cast during the legislative session?

I am sorry that you have overlooked the massive tax hikes that were enacted between 1999 and 2003 during the second Graves administration. The Graves administration raised sales, cigarette, business franchise, gasoline, "enhanced" revenues, and raised a variety of charges and other fees. These votes were included in our vote ratings for each of these years and are available for viewing at www.kansastaxpayers.com. More recent tax hike and fiscal votes from 2003-05 Kansas legislatures are there now too.

Since Governor Graves left office this trend has largely continued albeit at a reduced level since the unsuccessful effort to raise broadbased state taxes under Governor Sebelius' leadership failed in 2004. Democrats lost seats in the Kansas house due to their support for higher spending and taxes last year.

Growing Kansas spending and taxes have occurred due to pressure from liberals and fiscal leftists supporting an expansion of Kansas spending in both major political parties in this state since the 1970's. I heard that you are claiming that our vote rating is "partisan". I would point out to you that the two lowest scores in the 2005 house rating is for two Republican house members. In 2004's scorecard there were four senators who receive scores of zero. Three were Republicans.

I am sorry that you seem to be unable to comprehend the meaning of oligarchy and the damange created by the appointed Kansas Supreme Court as you as an elected official helped surrender your constitutional powers to the judges. The courts treated you and your 164 legislative colleagues in such contempt that they refused to even let any legislator appear before them before they issued their edicts. You helped to meekly surrender your powers as an elected official and violated your oath of office to defend the Kansas Constitution.

Our form of government is in jeopardy in this state due to this judicial usurpation of power that you and over 40 other house colleagues repeatedly surrendered during the special session. Sadly, only two Democrats in the legislature resisted this surrender. If this trend is not reversed the Kansas legislature will become an elected advisory body to the real power in this state: the appointed judiciary and the governor. I have heard a number of legislators on the floor of the house point this out to the entire house. I was disappointed that you and so many of your colleagues ignored this problem.

Kansas is in trouble. This state is stagnating economically due to hostile fiscal policies that have been created before you took office but also by these liberal/left wing policies that you are helping promote while you have been in elected office. I'll provide you with some excellent commentary from a Kansas businessman that was posted earlier this week on www.kssmallbiz.com that discusses this economic trend. I could share with you stories about the odious "rich" that leftist politicians have helped drive out of this state but this action does have consequences. I hope you'll read this commentary and see a private sector perspective and how this trend is occurring:

FUNDING OF BUSINESSES: A DIFFERENT PERSPECTIVE PART II
By Kenneth Daniel
August 31, 2005

In my article of last week, I made the point that the risk capital of businesses is almost exclusively made up of personal savings invested in the business by the owners plus profits left in the business. When we take money away from businesses in the form of taxes, we are curtailing their financial viability, their growth, and their ability to compete with businesses in lower-tax states.

Employees and others, including governments, that depend on our businesses to provide salaries and tax revenues are better off if businesses are financially sound than if they are not. And, we really, really want our businesses and their owners to park their wealth here instead of elsewhere to support jobs and generate taxes for Kansas.

What other things are preventing our business owners from keeping wealth here?

Last week the American Shareholders Association released a report on the impact of the American Jobs Creation Act, signed into law in 2004 by President Bush. A provision of the act allows companies to bring their foreign profits back to the U.S. at an income tax rate of 5.25% instead of the normal 35% domestic rate.

Previously, companies had to leave the profits overseas to avoid U.S. taxes, and wealth that could have supported jobs in the U.S. was left overseas. Among the study's findings:

According to the International Strategy and Investment Group (ISI), 91 companies listed on the S&P 500 have repatriated more than $191 billion back to America that otherwise would have been invested in other countries.

JP Morgan estimates the provision will increase GDP by an additional 1 percent over the next two years.

JP Morgan further estimates $120 billion will be used for new investment, which will create 500,000 new jobs over the next two years.

The lesson here is the same – business wealth is good. We want and need our businesses to keep their money here. An interesting question is whether Kansas businesses that repatriate money will be hit with the full state income tax for doing so. If they are, multi-state businesses will almost certainly repatriate their profits to some other state that does not have a state corporate income tax.

Another way we punish our Kansas businesses for keeping their money here is through our Franchise Tax. Kansas is one of fewer than twenty states that have a stand-alone tax on the net worth of a business. The old adage is "if you want less of something, tax it". Kansas apparently wants less business wealth in the state.

Kansas has yet another tax to punish business owners who keep their wealth here, and that is the estate tax. In 2010, when the federal estate tax goes away, Kansas will be one of fewer than twenty states with an estate tax. This is a virtual guarantee that our wealthiest business owners will retire elsewhere or sell their Kansas business interests so they can move their wealth. Even if they don’t, the business is at risk of losing part of its capital or of being sold to pay estate taxes.

Kansas is likely to continue to be one of the slowest-growing states as long as we continue to eat our business nest eggs with punitive taxes. Even when the business owners aren’t whining, those eggs are being eaten, and we will continue to ship most of our best and brightest kids to other states.

The federal government has figured this out. By lowering taxes on businesses and getting businesses to bring their wealth back to the U.S., the national economy is cooking along extremely well. Will we ever figure this out in Kansas?

Kenneth Daniel (kdaniel@kssmallbiz.com) is a Topeka small business owner and free-lance writer. He is publisher of www.kssmallbiz.com, a website dedicated to Kansas small business.