Kansas GOP Insider (wannabe): And This Guy Is on a List to Be Commerce Secretary

Monday, September 19, 2016

And This Guy Is on a List to Be Commerce Secretary

Rep. Mark Hutton is gunning for a job as Secretary of Commerce in a hypothetical Lynn Jenkins administration. (Jenkins will run for Governor in 2018. Stay tuned. I can give a list of those rumored to be on the ticket with her AND a short list of potential cabinet members as soon as my sources give the go ahead. <Taps foot>)

(Note: I'm hearing quite varied accounts on a hypothetical Jenkins run. Specifically, I'm told from people I trust that there IS a list of potential cabinet members and running mates and that there IS NOT a list. The rumor mill is in full swing.)

This may be the reason Hutton decided to throw flames at current Secretary of Revenue Nick Jordan. Jordan penned an opinion piece for the Star and Wichita Eagle last week. Jordan argued that the LLC income tax exemption has created a a healthy environment for business growth. Hutton scribbled a stunning rebuke essentially saying individual earnings rightfully belong to the government. 

I feel like a broken record saying this, but I'll say it one more time: Good people can and do disagree about the LLC exemption. It's reasonable to discuss whether the policy is fair to all Kansans. It's reasonable to discuss whether the government is absconding collecting enough revenue to provide vital services.

There's nothing wrong with having the debate about a policy issue. That said, Hutton should probably be removed from consideration for any role dealing with revenue or economics, because his main argument shows a stunning misunderstanding of basic economic principles. He argues the tax policy should be scrapped because the savings individual business owners garnered via the LLC exemption aren't enough to add a single staff worker.

He writes:

You can't create a job with $1,046... It takes about $20,000 to pay a person minimum wage, including the payroll burden, and the average paycheck in Kansas is about $25,000. Less than 1 percent of the 331,174 tax filers realized enough tax savings to create a single job--and that's if you believe it only takes extra cash to create a job, regardless of whether or not the business has a task for the employee to perform.

I feel like beating my head on a desk, because I have to explain this, but here goes: The idea behind low taxes to increase growth is simply this: If 300,000 of the small business owners who received tax relief of $1,000 decided to use the extra money to install a single window in their businesses, that's millions, which would employ quite a few new window installers. More simply put: Individuals can spend their money better than government can.

I guess Hutton believes that in order for a tax incentive to be worthwhile, it needs to save every individual an average of $20,000 to $25,000 per year. I'm fine with that target, but my math says that won't work. Most people don't pay that much in the first place.

And if a policy goal is simply to create jobs that pay the Kansas average, why don't we just take everyone's earnings over $25,000? The government could create SO many jobs that way. Oh wait. That kind of thing has been tried before about a million times throughout human history. It starts with people waiting in bread lines slowly starving, followed by riots, wars, and piles of bodies. 

I will give Hutton credit for his admission that government hasn't done a reasonable job of controlling costs. Back in 2012 when this tax plan was initiated, the budget presented to legislators included a variety of pay-fors. Making cuts is politically difficult, so to pass a budget, it required a compromise--one many conservatives should have refused to support. Part of that was a sales tax increase and the other was just removing spending cuts. Brownback signed it, but he wasn't the author of it. That was Sen. Vicki Schmidt and former Sen. John Vratil, so-called moderates, who were content to craft a burn-it-down budget. The tax plan we're arguing about today should rightfully be called the Schmidt plan or the Vratil plan. (Dear Brownback, please learn from this. When presented with a Sophie's Choices sure to be presented by the next legislature, do yourself a favor and veto. OR, if you are unwilling to do that, let their garbage become law without your signature. Please!)

If we're going to have a debate about the LLC exemption, then we need to be careful to argue it in ways that don't damage the very foundation behind the fight for smaller government and more freedom. We need to remember that when we are talking about taxes, the state budget, and revenue, we're not talking about government's money. Government didn't earn it. Government didn't produce it. Small business owners earned that money. Politicians can debate all day about how much money is needed to efficiently fund government, and I will ALWAYS argue the dollar amount required is far less than any politician suggests. When Republicans take part in that debate, they need to remember that the money they're talking about is money they intend to take out of the pockets of the people who earned it, and debate accordingly.

Hutton's opinion reads as if he believes government should be in charge of all the money, and the plebes who earned it by producing something or serving others should get an allowance from our government overlords. I thought all Republicans agreed that the free market is great policy in general, and any Republican who doesn't believe that probably shouldn't be in charge of Kansas revenue or commerce in a future administration.


  1. "Dear Brownback, please learn from this" - Brownback doesn't learn. That's why Obama has a higher approval rating in Kansas than Brownback. We have a JV governor.

  2. Hutton's a goon. He's turned his LLC obsession into an ideological witchhunt to the point he's lost credibility. There are, as you've said, legitimate points on both side of the debate on whether there should be a complete exemption. However, it's unquestionably helped many people save money and grow their businesses, and people like Hutton look ridiculous when they make statements like he did.

  3. You are right that Hutton's credibility is gone and others will join him --- once everyone knows their true motive in attacking the LLC loophole. It has little to do nothing to do with their own personal feelings and more to do with the personal gain they will receive by rolling back other parts of the Brownback tax cut.