Tax away in Kansas!

From a CJonline article on a proposal to raise sales tax to solve the state's budget woes. To raise or not to raise, that is the question:

The battle over Kansas economic projections intensified Monday with release of a Wichita State University study indicating closure of a state budget deficit with a $350 million tax increase would be less harmful to general economic vitality than an equivalent reduction in government spending.

The report adds to political debate raging in the 2010 Legislature on whether the state's financial deficit ought to be resolved by slicing at the edges of government spending or by imposing new taxes.

WSU's Center for Urban Studies and Kansas Public Finance Center outlined the influence on employment and economic output of a 1 percent increase in the state's retail sales tax. It follows a January report generated by a researcher at The University of Kansas' Center for Applied Economics.

A) What you tax, you get less of. Tax sales? You get fewer sales.
B) This study presupposes this tax increase would operate in a vacuum. With the spending spree of Congress and the President, big tax increases are coming to us all. I heard a retailer tax-apologist tonight on TV saying the same thing they said when campaigning to raise local sales taxes last year to fix roads. "It's only a little bit per person, and the government needs to the money." Sure, the same government that runs everything so efficiently needs MORE money to manage.
C) Sales taxes are the most regressive tax. They disproportionately impact the poor and elderly.
D) Our taxes are already higher than the states we compete with (primarily Missouri). Sure, let's give Kansans another reason to go support the Missouri economy.
E) Accomplish D, you drive Kansas businesses out of business, and you don't get the revenue you want. See my earlier post on the proposal to raise cigarette taxes.

In a so-called Republican state, the solution is still always the same -- RAISE taxes. Try lowering them for once and see economic activity increase, sales stay local, and revenues to the state actually increase!