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Current Events from a Science Perspective

” The answer is, “The Truth”.

Many high-profile disasters such as the Challenger explosion, the Deepwater Horizon debacle, and the Chevrolet Corvair which asphyxiated its passengers, can be traced to a failure of ethics. For Kansans who value people’s rights, healthcare, the environment, fiscal responsibility, lower food taxes, fair courts, and good schools – the 2021/2022 legislative session was an unmitigated disaster. The ethics failure that made it all possible was that of the Kansas Chamber of Commerce (KCC). In the 2020 election, they used unethical tactics to purge the legislature of moderates, leaving a supermajority of Republicans and far right extremists.

Two core values of the KCC are to be ethical in all that the Chamber advocates for and does, and to be passionate about the economic growth of Kansas and its people. However, the KCC is not passionate about the economic prosperity of all Kansans or all businesses as the KCC does not represent the small businesses in Kansas well. Those businesses are embedded in their communities and tax cuts take money away from things they value: roads, schools, hospitals, healthcare, and social services. This caused many local chambers of commerce to become disgusted with the KCC. As the Junction City Chamber of Commerce explained: “So when the Kansas Chamber decides to endorse a tax policy that only benefits very large industries… it just stands to reason that that tax policy is not a fit for most of their members.”

Under the leadership of CEO Alan Cobb, the KCC has increasingly aligned itself with Americans for Prosperity (AFP), which favors the prosperity of the already wealthy. That is not surprising, as Mr. Cobb once managed Government Affairs for Koch Industries and he later founded the AFP organization in Kansas. Not only does the KCC now favor the wealthy, but it has acquired questionable ethics.

After the 2020 elections, Don Hineman, past Majority Leader of the Kansas House, wrote an article, What is the Kansas Chamber of Commerce Hiding? Alan Cobb had recently claimed the Chamber’s political endorsements are 100% fact-based. Representative Hineman disagreed, writing “That is not the whole truth, and in some cases, it is an outright lie. Besides endorsements, the KCC sends out postcards that demonize the incumbent legislators they want to defeat. One of their most damaging postcards claims the targeted legislator voted to ‘retroactively raise our state taxes by $1.2 billion’. The card implies that, if re-elected, they would vote to raise your taxes. That is wrong, but it is only part of the story. That $1.2 billion tax increase, which passed in 2017, was deemed necessary by more than 2/3 of the Kansas Senate and 2/3 of the Kansas House. It was passed to correct earlier tax cuts that had devastated the state’s finances.”

He continued, “The state would have gone broke unless the tax increase passed. Most of the Republican Leadership and many staunch Republicans voted for the bill. However, the KCC is not targeting ALL the legislators who voted for the tax increase. The KCC’s leaders have mastered the craft of appearing unbiased and truthful when they are not. They are selectively targeting the independent-minded incumbents who do not obediently go along with whatever the Chamber wants.” My constituents received this card, even though I wasn’t even in the legislature then. So much for “100% fact-based”.

One thing the KCC really wanted was an additional tax cut for corporations who had repatriated intellectual property hidden offshore, even though those corporations had already received a lower Federal tax rate. The Republican leadership was happy to comply. They passed a tax bill which would have cost the state about $600 million over the next three years, most of that going to large corporations. The Governor vetoed it. Several moderate Republicans joined the Democrats in sustaining the veto, even though they had received severe arm twisting from the Republican leadership. One of the moderates spoke on the House floor, “We teach our children not to be bullies, yet the leadership is trying to bully us into voting for this bad bill “. He went on to explain how people had died on roads in his district because there wasn’t money to repair them, and how the state needed many things it couldn’t afford because of tax previous cuts. After the veto was upheld, the disappointed corporations proceeded to “Postcard” that legislator, flooding his district with postcards attacking him, until he had had enough and resigned in the middle of his term, citing stress as the reason.

In the next election, the KCC and AFP ran a smear campaign against many of the moderate Republicans who had voted to sustain the veto. They sent out dozens of postcards demonizing them, distorting their positions, misquoting them, and using misleading photoshopped pictures. The postcards were lies and bullying at its worst, but there was little the moderate candidates could do as political lies are considered protected speech. The negative campaigning worked, and the number of moderate Republicans in the legislature went from about thirty to just five. In the next session, the KCC got the tax cut they wanted, and Kansas is now suffering the disastrous consequences.

This article is specific to Kansas, but If your state has a chapter of Americans for Prosperity or a state Chamber of Commerce like the KCC, then you should try to to elect independent-minded legislators who will vote for legislation in the best interest of the average citizens. There is really no requirement for being a Chamber of Commerce. The Kansas City Greater Chamber of Commerce takes great pains to be sure they are not confused with the KCC.

Please note: This article was taken from one published in the Kansas Reflector at https://kansasreflector.com/2022/05/25/where-did-the-kansas-legislatures-moderates-go-the-kansas-chamber-targeted-them/.

The 2017 Tax Cuts and Job Act (TJCA) really did a job on the American people. The results were predictable. A similar tax cut in Kansas in 2012 was a disaster for Kansas. It benefited the rich, led to a stagnant economy, took money from infrastructure and schools, and put Kansas far in debt. States cannot run a deficit, so Kansas finally had to make up for it in 2017 with the largest tax increase in Kansas history.  

The TJCA was based on the trickle-down theory which, as experience has shown, increases public debt and makes the wealthy wealthier – at the expense of the middle class and low wage earners. The CBO estimated that the TJCA would increase the national debt by almost $1.9 trillion over the next 10 years. It cut the corporate tax rate from 39% to 21% and allowed companies to bring their intellectual assets (GILTI) back to the United States at an even lower tax rate. Those who profited the most were the wealthy and corporations, as it gave permanent tax cuts to corporate profits, investment income, inheritance taxes, estate taxes, and preferential tax treatment to pass-through income*. Some banks, for instance, will pay far less than the 21%. Some of the tax cuts went to the middle class, but they will sunset in 2025 while the tax breaks for businesses and corporations do not sunset.

What is better than lobbying? It is electing Legislators who the large corporations can depend on to cut their taxes. For Republicans, adding to the national debt has always been anathema. Sadly, it was a Republican President and Legislature who passed the TJCA. The chart above lists some of the corporations who donated heavily to Republicans who they could depend on to vote to cut their taxes. It also lists the amount they gained from the tax cuts. Those corporations received about a 6000% return on their investments in electing compliant politicians. Not bad, especially when your bank pays you about 2%. Not only that, but the New York Times reported that there were 55 very profitable companies, such as Nike, FedEx, and Duke Energy, that paid no taxes at all last year. Considering subsidies, some of them had an effective tax rate of as much as a -50%.

Also, the US subsidizes oil and gas companies so that investors never lose. Every year, the U.S. federal and state governments pour around $20.5 billion in subsidies into the oil and gas industry. New research, published in Environmental Research Letters, puts a value on the effect that the16 tax breaks and exemptions will have on the 1,000 U.S. oil and gas fields projected to be built before 2030. The paper found that if fossil fuel prices stay high, most of the subsidies — 96 % in oil, 87% in gas— will go directly to the pockets of investors as profit. And if prices go down, these subsidies will help 60% and 74% percent, respectively, of new oil and gas fields to remain profitable.

So there you have it. If you’re wondering why you pay so much in taxes yet receive so little back, it is because your state and federal governments give away so much money to help the wealthy and profitable companies become wealthier and more profitable. Please consider that when you vote.

*A recent study by Treasury economists found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the pass-through provision. And much of that went to the top 0.1%.