Does the Kansas City Star really care about fiscal responsibility?
The editorial in today’s Kansas City Star, “Wanted: Fiscal responsibility in candidate plans,” compared proposals by Senators Obama and McCain:
Experts say both candidates’ economic proposals would increase the federal deficit. That’s unacceptable. The country is ready for a president who will model fiscal responsibility.
The topic of this editorial is welcome, but why is the Star writing an editorial about fiscal responsibility when they support most tax increases, and do such little investigative reporting about waste of tax dollars? Why does the Star do so little to promote accountability in government?
In Kansas legislative races, will the Star use fiscal vote ratings of legislators as compiled by the Kansas Taxpayers Network in their endorsements to show which legislators vote consistently for higher taxes? Has fiscal voting and responsibility ever been used as a criterion by the Star in their political endorsements?
The Kansas City Star did everything it could to promote the bistate taxes in recent years. Has the Star ever investigated the $3.6 million spent by the 501(c)4 organization “Think Big” which changed its name from “Bistate Arts and Sports Corporation” to promote a tax on the citizens of the area with little accountability for how the money would be spent? How and why did that group spend $352,500 on legals fees? And $462,379 on printing and publications?
Click here to see view a PDF of the complete IRS 990 from the Think Big Committee in 2004.
Spending is out of control on both the federal and state levels and the Star has consistently been a cheerleader for higher taxes. Unfortunately today’s editorial by the Star wasn’t about government accountability and transparency, but rather a Star endorsement of Obama:
Based on proposals so far, however, Obama’s plans for reducing inequalities in tax policies and helping working families offer the better blueprint to move forward.
Tags: Bistate Tax, Fiscal responsibility, IRS 990, Think Big Committee
June 15th, 2008 at 9:40 pm
Your story sound like an old myth told by the republican party. This fairy tale was re-told by Republican National Chairman Ed Gillespie when he said in a Dec. 3, 03 speech: “80% of the tax relief for upper income filers goes to small businesses.” It’s untrue – and a classic example of a statistical distortion gone amok.
It may be true that 79% of upper-income taxpayers have some income from business, but Gillespie’s definition of “small” business actually includes big accounting firms, law firms and real-estate partnerships, and “businesses” that are really only sidelines – such as occasional rental income from a corporate chief’s ski condo. In fact, tax statistics show that upper-income taxpayers get far more of their income from salaries, capital gains, stock dividends and interest than they do from small business.
By twisting statistics and over-hyping, Republicans are spoiling for themselves what would otherwise be a perfectly serviceable argument: lowering taxes on the most affluent Americans does indeed lower taxes on many small businesses, and thus creates more jobs. But not nearly as many as Gillespie and some other Republicans are claiming.
It is undisputed that that many small-business owners report profits from their companies on their personal income-tax returns and not on corporate returns. It’s also true that small business is a major source of new jobs, and economists generally agree that lower business taxes eventually tend to produce more hiring. So cutting the top tax rate probably does stimulate some small-business hiring. But how much? Nothing close to 80%, it turns out.
The 80% claim originated last May with a report by the Republican staff of the Joint Economic Committee of Congress, where it was prepared as ammunition for the debate over the second Bush tax-cut bill which eventually became law later in 2003.
That report concluded that 79% of the highest-income Americans have some business income. Then the report made a huge leap, claiming “These small business owners would receive 79 percent of the … tax savings” from cutting the top tax rate. But wait a second – very few of those “small business owners” are really running dry-cleaning stores. A Republican committee staff member confirmed to FactCheck.org that their report is counting anybody who made even one dollar of profit from a hobby business as a “small business owner” if they reported that income on Schedule C of their federal income-tax returns.
Their method also counts as a “small business owner” any member of an investment club — someone who put $50 a month into a pool to buy stocks with friends and then reported a few dollars of dividends and capital gains on a K-1 form from the partnership at the end of the year.
And that’s not all. Also counted as “small business owners” would be:
–A corporate executive who made $500,000 in salary and bonuses, and who also had $3,000 in income from renting out his yacht.
–A TV anchorwoman making $1 million in salary and reporting $25,000 in speaking fees as Schedule C income.
–A partner in a national accounting firm who has no side business at all, but who gets a big chunk of his income as a share of the giant partnership’s profits.
It’s silly to call any of these “small business owners,” but Gillespie went even beyond what the report said. He said 80% of the tax relief went to “small businesses,” (as opposed to “owners”). Not even the Republican staff report can back that statement.
So how much of the benefit really goes to small business? According to an analysis by the nonpartisan Tax Policy Center, done at the request of FactCheck.org, business income accounts for just over 22% of the income that will be reported this year by the most affluent American households. Those upper-income taxpayers actually get more from interest, dividends and capital gains than they get from business income, but Gillespie said nothing of the tax benefits on that score.
Both the Republican study and the Tax Policy Center focused on the same group of elite taxpayers — those paying the top income-tax rate. (That’s the rate which dropped to 35% this year from the previous level of 38.6% under the most recent tax cut.) In an earlier look at the same group, the Tax Policy Center found that roughly three out of four taxpayers paying the top rate got less than half their income from business. That’s a fact that some Republicans continue to ignore as they spin their small-business fable.
June 15th, 2008 at 10:15 pm
sasnak: Why don’t you get your own blog when you don’t even address the topic of my postings in your comments?
The Kansas City Star supports almost all tax increases, and does little to promote government accountability or transparency. Where do you address the main points of my posting? What points are you responding to?