State of affairs
guest opinion By John Butwell
Earlier this week, thousands of Kentucky’s teachers converged on Frankfort. They arrived by the busload, and the speeches they made were full of fiery passion for the importance of education, and teary compassion for the children being educated. State legislators: are you listening? Taking notes? There will be a pop quiz in November, at election time.
Your governor has proposed some major changes in our state’s tax system which you need to study. There are two which you should pass:
· An increase in the state’s almost non-existent cigarette tax, from 3 cents a pack to “at least” 40 cents, and….
· Taxing pensions as income, so a person making $40,000 a year in pensions (which weren’t taxed as they were built up) won’t be excluded from taxes which a person making $40,000 in wages must pay.
Even a blind pig finds an acorn now and then. Gov. Patton is no pig. But he’s groping blindly for solutions to a problem which is beyond his grasp, because he has no power to make you legislators actually pass the tax reforms which our state desperately needs. Since he must make his suggestions “play in Peoria”-i.e., Frankfort-he has come up with some real dillies:
· A tax on business activity, not income, which would make our state’s businesses pay taxes on their costs as well as their profits.
· A tax on certain services (but not all of them), such as dry cleaning, but not the politically powerful professions of lawyering, doctoring, and selling newspaper advertising.
· Repeal of the state’s vehicle taxes, which would miss the point that we need lots more tax revenue, but might sweeten the passage of his other proposals by including a “tax cut.”
None of the above are likely to pass, but the last three are signs of desperation on Paul Patton’s part. He is stuck with the unhappy fact that, as he told the assembled General Assembly: “There is no doubt that you can adjourn without addressing the problem. There is no doubt you can pass a fictitious budget.”
I’d urge him to push for massive revision of the state’s income tax code so the wealthy and corporations actually pay taxes commensurate with their holdings and earnings, while the working poor are allowed to continue struggling to support themselves on a daily basis without also having to support the government.
His proposed tax on services is inconsistent with this goal. Everyone already pays a 6 percent sales tax on everything we buy, except groceries. That makes sure everyone pays at least some part of supporting the government services we all receive, and that’s enough.
But massive, actual reform of the state’s income tax code would also accomplish Patton’s stated goal of closing “the biggest loophole of all, the loophole that permits huge multi-national corporations to operate in Kentucky while paying practically no taxes to pay for the government services they use every day.”
Patton says he sees no problem with corporations taking advantage of loopholes passed by the legislature; in particular with the Lexington Herald-Leader reorganizing as a “limited liability corporation” while it’s owned by the huge media conglomerate Knight Ridder.
In comments which bring to mind our late ex-Gov. Wally Wilkinson (who said every citizen has a “responsibility” to avoid as many taxes as possible), Patton places the blame for such evasions on you folks who write the laws. “We have created these laws; we have every right to expect our corporate citizens to use them,” he says.
Well, maybe. But when the “corporate citizen” is a newspaper which presumes to preach correct conduct to the rest of us, I think it takes a lot of gall to stiff us on the bill. So by all means, close the loophole! But REALLY close it, which of course you legislators will not do.
Unless, unless you legislators actually hear the mounting pressure for you to DO your jobs and DO something about our state’s financial crisis-as well as the serious threat the crisis represents to our children, their educations, and our state’s future.
It’s a test, and it’s open-book. Everyone is watching. Our teachers are gathering to give us all a mass lesson, but especially you. Back in 1990, we thought you had learned your lesson. Try, try again-harder, this time.
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