Tax breaks create few winners, many losers
The Kansas City Star
The residents of the Kansas City metro area should be thankful for those business owners who create jobs and are more than willing to pay their fair share of taxes, realizing that it takes money to run a school district or a government. These companies contribute to the local tax base to provide better parks, roads and other public services benefiting their community.
Then you have companies threatening to move, politicians willing to accommodate them with tax incentives and a media that occasionally does not look beyond what is presented to them.
Of course the winners in the tax credit mess are these companies that get a larger profit by skirting the need to pay taxes. Without contributing to their costs, these businesses will still receive police and fire protection and roads to get them to and from work. The children of the employees working at these establishments will still get an opportunity for a quality education.
If the State of Kansas did not know that AMC was about to be purchased by the Dalian Wanda Group when they offered the incentive package to move across the state line, then they need to put together a better due diligence team. The tax break here means more profit to be taxed by the Peoples Republic of China. I’m quite certain that the Communist Government is very pleased that the people here were willing to give up some services to help out their cause.
It was interesting when the local media treated the Wanda Group like heroes when they offered $1.3 million to area schools. No one looked into how much their tax abatements are costing us, saving them, in school tax revenue. If you looked into the donation at all, you see that it was not cash, but supplies, screenings and tickets. This obviously has to hurt AMC financially as there are never any open seats in movie theatres and only a slight mark up over costs for concessions.
When a city touts a new business, they talk about jobs and average salaries. Does anyone ever ask a company bringing 50 jobs with a average pay of $60,000 a year how much the CEO is paid and how many employees will be taking phone calls, entering data and returning to their parents house after work because they only make $8 an hour? Do you ever ask what is added to the tax base?
Is Gov. Sam Brownback’s agenda financially dangerous for Kansas? In August of 2011, 17 prominent area business leaders wrote to Governors Brownback and Missouri’s Jay Nixon asking them to end the border war saying “Because of our unique bi-state community, too often these incentives are being used to shuffle existing business back and forth across the state line with no net economic benefit or new jobs to the community as a whole”. Governor Nixon was willing to come to the table.
f course these are only Chief Executive Officers of some of the biggest corporations in the region so let’s get an opinion from someone on the inside.
The Wichita Eagle quoted conservative Kansas Senate Tax Chairman Les Donovan calling it “the worst tax bill to ever come out of the Statehouse”. In the same article former Assistant Majority Leader and Kansas State Chair of the Republican Party, Representative Rochelle Chronister, said, “Kansans need property tax relief, instead this proposal was crafted by special interests and a Missouri billionaire. What does it do for Kansas? It bankrupts the state in two years”.
Will Kansas go bankrupt? That obviously remains to be seen, I just don’t want them taking Missouri with them.
David Slater is mayor of Pleasant Valley, Mo., and vice president of the Missouri Metro Mayors’ Caucus