Opposition to the Kansas Income Tax

There is an old Saturday Night Live mock commercial I have been thinking about lately. The commercial was for "First Interstate Change Bank" as I recall, and it featured employees and customers extolling the virtues of the bank who's sole function was to make change. If you need four quarters and you had a dollar bill, they can do that. If you need a crisp new twenty to give a grandchild as a birthday present and only have a couple of wrinkled tens, they can do that. The commercial featured Phil Hartman explaining the bank's business philosophy. "People ask me how we make money doing this and I tell them 'Volume'".

This week a new Kansas political group called Kansas For No Income Tax (headed by a former Kansas Republican party executive director, Ashley McMillan) was created to oppose the Kansas Income Tax. This seems in line with the push nationally to radically change the taxing mechanisms in this country (e.g. Herman Cain's 9-9-9 plan; Rick Perry's support for a flat tax, etc.). Of course if you eliminate the income tax you have to find a way to replace the income it generated because the need for government services will not disappear. This mostly likely means a switch to a sales tax based system. But that is not what the news report said when announcing the new group. Rather, the report stated the loss in income could be made up for by economic growth and closing loopholes.

Phil Hartman would explain this new tax strategy as "volume". But, no matter how many loopholes you close, no matter how much the tax base grows, you cannot bring in any income tax revenue if you have zero income tax. Zero times any amount is still zero. There is an argument to be made that a flat tax with no loopholes could replace the revenue of the current progressive tax system. That argument may or may not be persuasive but at least it is a valid argument. Conversely the idea that you can close loopholes and gain revenue after you eliminate the income tax is incredibly misleading, false, wrong, stupid you name it. Once the tax rate is set to zero there are no loopholes because there is no tax. End of discussion.

I also have grave concerns about the idea that cutting income taxes will produce jobs. First, wages are deductible for businesses presently. I fail to understand how lower tax rates on businesses will spur job growth - if the tax rate is such a concern the business could hire more employees and increase its deductions. I suspect it is not the tax rate that is keeping hiring down. Second, when you really study why businesses start up or expand you discover taxes are a very minor consideration. Does anyone remember the big push for enterprise zones in the late 1980s and early 1990s? It was the same idea - if you cut or eliminate taxes in impoverished areas you will release a latent entrepreneurial spirit which will produce business and jobs and lift the area out of poverty. Only they didn't work. The hurdles to business are very high.  Taxes are way down on the list and cutting or eliminating those taxes had basically zero effect on business growth. Making capital more available at a lower cost, perhaps by expanding the Small Business Administration, would have a much greater impact.

I hope to discuss the pros and cons a sales tax or property tax based system as these proposals move forward. For now I just wanted to make the seemingly obvious point that closing income tax loopholes will not make up for revenue lost if you completely eliminate the income tax. I just wish that point had not been lost on the new advocacy group focused on influencing Kansas's tax policy going forward.

State of Kansas v. Planned Parenthood

The Kansas City Star is reporting today that some key evidence in the State of Kansas's case against Planned Parenthood has been destroyed. At issue is the original documents Planned Parenthood filed with the state department of health. According to reports the records were probably destroyed during a routine document purge in 2005. My guess is this will mean the end of the state's criminal case against Planned Parenthood as I will try to explain.

First, some background. I have not been following this story particularly closely so I do not know all of the details, but a basic overview will hopefully suffice. The case was initiated by Phill Kline when he was the Kansas Attorney General. During his investigation of abortions performed by Planned Parenthood he made copies of the original documents filed with the Department of Health and, apparently, returned the originals. At some later point Planned Parenthood again submitted documents regarding its abortion practices. According to the Attorney General the documents contained materially different information than what was in the copies he made and so criminal charges followed. The accusations of the charges essentially boils down to whether PP maintained sufficient records as required by law and whether PP knowingly submitted false information to the state. The case is finally making its way to trial and the Johnson County District Attorney has notified the court the original documents maintained by the Department of Health have been destroyed. (Phill Kline lost his bid for re-election as the Kansas AG and was appointed to fill the unexpired term of the Johnson County DA. Kline brought his files with him and initiated the criminal case as the Johnson County DA).

In a normal criminal case the loss of the original records would not be crippling to the prosecution. Photocopies of documents are almost always admissible, especially if the originals were destroyed inadvertently by the record keeper. But this is far from a usual case. Just this month a disciplinary panel recommended Mr. Kline's Kansas law license be indefinitely suspended (one step short of being disbarred) because he lied to judges and the grand jury about this investigation and other related investigations. The Kansas Supreme Court has not yet ruled on the recommendation but it usually accepts the recommendation of the panel or increases the punishment - it seems unlikely Kline will not be severely punished by the Kansas Supreme Court. As a result the original documents are crucial. Because what the prosecutor is faced with now is one set of documents maintained by the defendant, Planned Parenthood, and another set maintained by an attorney who has been found to have repeatedly mislead the court about this very case. Planned Parenthood will argue the state's documents are forgeries crafted by Kline to falsely implicate them and, without the originals, it will be impossible to prove they are not. 

Usually when the defendant claims the police or prosecutors tried to frame them they sound unbelievable. The state does not have to prove they are not telling lies or forging documents because the public does not believe the state does that, generally speaking. But, because of Kline's documented misconduct in this case, it is the prosecutor who will be difficult to believe. That is why the current prosecutor wanted/needed the original set of documents from the Department of Health - so Kline would not be an issue in the case. If the originals were different than the second set of documents provided by Planned Parenthood, the case would be about those inconsistencies. If the originals were consistent the case would be dismissed. Without the originals the case comes down to who do you believe.  It will be virtually impossible to prove to twelve people beyond a reasonable doubt that the documents maintained solely by Phill Kline and his office are genuine since he has been shown to lie to the court in this very case. That is why I believe the prosecutor will eventually have to dismiss this case.

Of course the message boards are all a twitter with accusation about who destroyed the records - did Planned Parenthood order their puppet governor Sebelius to destroy them? Did the evil Attorney General Kline order them destroyed because he knew he had forged documents? Did the Illuminati destroy them to keep the Catholic Church from electing a new pope?

Actually I would guess he answer is much simplier, with no grand conspiracy. I expect Phill Kline did not instruct the Department of Health to maintain the originals because he had his copies.  The Department of Health, because the records were old, destroyed them in the usual course of business. Phill was a career politician not a professional prosecutor. I would guess this was a simple oversight on his part. He should have subpoenaed the records or obtained a court order requiring them to be maintained. I think he just made a mistake. A mistake which will ultimately mean the prosecution he was so desparate to bring about will ultimately be dismissed. That is not to say he did or did not forge the records. I have no way of knowing, although I would not put it past him at this point. I just don't think he would had the foresight or authority to either have the records destroyed or to know they would be inadvertently destroyed in the routine course of business.  As much fun as it would be to imagine the records destroyed as part of a vast conspiracy theory I think it was just boring incompetence.