The Kansas Experiment(nytimes.com)
nytimes.com
The Kansas Experiment
http://www.nytimes.com/2015/08/09/magazine/the-kansas-experiment.html?_r=0
6 comments
Kansas is a beautiful state but like most of the middle of the country its population spread, lack of "entrepreneurship-role-models" in most communities and talent flight hurt its chances of developing strong business culture even in an easy-to-do business environment.
I grew up in KC, MO and went to school on the state line. Many of the most promising students from my school and other schools would go out of state for college - and most that left haven't come back yet.
The fact that Denver, Kansas City, MO and Omaha all flank the state and contain more developed business centers also makes company development unlikely.
Looking at this shows how little concentration there is of companies in the whole mid-to-upper Midwest section.
http://www.geolounge.com/fortune-500-list-by-state-for-2015/
I wonder what has made Minnesota so successful.
I grew up in KC, MO and went to school on the state line. Many of the most promising students from my school and other schools would go out of state for college - and most that left haven't come back yet.
The fact that Denver, Kansas City, MO and Omaha all flank the state and contain more developed business centers also makes company development unlikely.
Looking at this shows how little concentration there is of companies in the whole mid-to-upper Midwest section.
http://www.geolounge.com/fortune-500-list-by-state-for-2015/
I wonder what has made Minnesota so successful.
Here's a nice example of a regional success story from MN. The area around Winona (a town on the Mississippi river between the Twin Cities and Rochester) has a growing cluster of businesses that work with composites.
http://www.mprnews.org/story/2015/08/07/composites-winona
Kansas wants this kind of development but doesn't want to put priority on environmental protection, outdoor recreation or the arts. All are important to the Winona story - as is the presence of a state university in the town.
I'm an 'expat' Kansan who now lives in MN so I have a deep appreciation for the difference between the two.
Kansas wants this kind of development but doesn't want to put priority on environmental protection, outdoor recreation or the arts. All are important to the Winona story - as is the presence of a state university in the town.
I'm an 'expat' Kansan who now lives in MN so I have a deep appreciation for the difference between the two.
> The fact that Denver, Kansas City, MO and Omaha all flank the state and contain more developed business centers also makes company development unlikely.
> I wonder what has made Minnesota so successful.
These are related. Between Chicago and Seattle, for major metro areas, there's basically just Minneapolis.
(Disclosure: Minneapolitan)
> I wonder what has made Minnesota so successful.
These are related. Between Chicago and Seattle, for major metro areas, there's basically just Minneapolis.
(Disclosure: Minneapolitan)
Would someone in tune with the fiscally conservative mindset be willing to offer an explanation for the apparent fascination with cutting taxes and downsizing government? Specifically, what are the proposed benefits for the average citizen?
When I took a job in Dallas my hourly rate was less than that of my job in Kansas City, MO. But my take home pay was higher for working the same amount of hours. Why? MO took 7% out of my salary for state taxes.
For a family making $50,000 (simplified) that's worth $3,500/year and everything else in Texas provided by the government seemed equal - the roads were nice, schools were good, crime wasn't noticable... So $3,500 a year for no noted improvement in life? That can help pay for college for children, buy a car or nice new technology, or increase retirement savings or charitable expenditures.
For a family making $50,000 (simplified) that's worth $3,500/year and everything else in Texas provided by the government seemed equal - the roads were nice, schools were good, crime wasn't noticable... So $3,500 a year for no noted improvement in life? That can help pay for college for children, buy a car or nice new technology, or increase retirement savings or charitable expenditures.
What about cost of living? And Dallas has much higher property taxes from what I've heard.
I'm not familiar with property taxes. Dallas is a collection of cities and counties all around one center - its sprawling so I bet taxes vary.
My anecdotal experience between the two cities is that Dallas is more expensive in the downtown area than KC but once you get into the suburbs the massive amount of development in Dallas brings prices down quickly so suburban living costs are similar.
My anecdotal experience between the two cities is that Dallas is more expensive in the downtown area than KC but once you get into the suburbs the massive amount of development in Dallas brings prices down quickly so suburban living costs are similar.
Localities in the Dallas area charge 2-3% of the market value of the property[1]. KC charges ~%0.3 of the market value (1.59% of the "assessed value" which is defined as 19% of the market value for residential properties)[2]. So, yeah, the property taxes are much higher in Dallas.
[1] http://www.davedowns.com/dallas-property-tax.htm [2] http://kcmo.gov/finance/property-taxes-2/
[1] http://www.davedowns.com/dallas-property-tax.htm [2] http://kcmo.gov/finance/property-taxes-2/
More money in your pocket because your taxes are lower. It generally goes along with not seeing anything in your life that is a benefit from government.
Do conservatives not use roads, schools, police, fire, healthcare and other services? Taxes pay for civilization.
(I'm not a fiscal conservative, but) Do more taxes pay for more and better civilization? Sometimes they do, sometimes they don't.
The question should usually be about the right level of taxes. The problem is that the feedback cycle is often really long. So we are still coasting off of the large investments and projects of the past like the interstate system, dams and waterways, electric grids, etc.
In the short term, we could ignore them (and mostly have), and lower expenditures, and everyone wins! Until it all starts falling apart (which is starting to happen) and we must make huge and costly investments all at once to fix them.
Charlatans are selling short term snake-oil and leaving out the last bit.
Eventually it would be nice for everyone to realize there is a cost to the level of civilization we enjoy. We do however need to be sure we are getting our tax dollars' worth.
The big question is whether our electoral system/voting population can be convinced to elect realists.
The question should usually be about the right level of taxes. The problem is that the feedback cycle is often really long. So we are still coasting off of the large investments and projects of the past like the interstate system, dams and waterways, electric grids, etc.
In the short term, we could ignore them (and mostly have), and lower expenditures, and everyone wins! Until it all starts falling apart (which is starting to happen) and we must make huge and costly investments all at once to fix them.
Charlatans are selling short term snake-oil and leaving out the last bit.
Eventually it would be nice for everyone to realize there is a cost to the level of civilization we enjoy. We do however need to be sure we are getting our tax dollars' worth.
The big question is whether our electoral system/voting population can be convinced to elect realists.
> The question should usually be about the right level of taxes.
No, it should really be about the right distribution of taxes (which includes not just "how much" but "from whom" / "on what activity".)
No, it should really be about the right distribution of taxes (which includes not just "how much" but "from whom" / "on what activity".)
Roads in Texas and Florida are just as nice as in other states. The argument for fiscal conservatism, as noted in Kansas, isn't against all taxes or government spending - it's about using less money to provide certain services or not providing certain services.
Moving from CA to TX as a highly paid person with no change in salary will result in a 13% direct increase in take-home pay. And my anecdotal experience is that I-35 is as well kept up as I-5 and toll-roads in Texas are more easily avoidable than those in Southern California.
Moving from CA to TX as a highly paid person with no change in salary will result in a 13% direct increase in take-home pay. And my anecdotal experience is that I-35 is as well kept up as I-5 and toll-roads in Texas are more easily avoidable than those in Southern California.
Texas provides almost no services to its citizens, unless you only need roads. I would not use them as a shining example:
"Despite having the highest birth rate, Texas has the worst rate of women with health insurance, and the worst rate of pregnant women receiving prenatal care in the first trimester, according to the report commissioned by the Legislative Study Group, a liberal-leaning research caucus in the Texas House. While Texas has the second-highest public school enrollment, the state ranks last in the percentage of people 25 and older with a high school diploma. And though Texas has the highest percent of its population without health insurance, the state is 49th in per capita spending on Medicaid, and dead last in per capita spending on mental health, according to the report. "
http://web.archive.org/web/20150401050939/https://www.texast...
Disclaimer: My personal opinion is Texas is hell on Earth, Somalia if it had a southern flair. YMMV. (Except Austin)
"Despite having the highest birth rate, Texas has the worst rate of women with health insurance, and the worst rate of pregnant women receiving prenatal care in the first trimester, according to the report commissioned by the Legislative Study Group, a liberal-leaning research caucus in the Texas House. While Texas has the second-highest public school enrollment, the state ranks last in the percentage of people 25 and older with a high school diploma. And though Texas has the highest percent of its population without health insurance, the state is 49th in per capita spending on Medicaid, and dead last in per capita spending on mental health, according to the report. "
http://web.archive.org/web/20150401050939/https://www.texast...
Disclaimer: My personal opinion is Texas is hell on Earth, Somalia if it had a southern flair. YMMV. (Except Austin)
Those statistics are sobering. I'm not sure what current policy can do to change the amount of people over 25 with a high school diploma - but that could be because of many factors including high immigration from other states (Texas has had net inflows from almost every state for 5+ years) mostly on the bottom end of the scale.
The insurance statistics are also sobering.
But Texas has loads of opportunity and many programs for business development. It would also be easier to save up money to move to CA if you were in Texas than the other way around...
The insurance statistics are also sobering.
But Texas has loads of opportunity and many programs for business development. It would also be easier to save up money to move to CA if you were in Texas than the other way around...
> But Texas has loads of opportunity and many programs for business development.
I keep hearing "business development" thrown around, but it really sounds like "avoiding paying taxes". As Kansas has shown, it drives your state into the ground.
I keep hearing "business development" thrown around, but it really sounds like "avoiding paying taxes". As Kansas has shown, it drives your state into the ground.
And the businesses don't want to come to Kansas that's for sure.
The biggest complaint from then largest employers in Wichita in regards to WSU was the lackluster education programs in engineering and computer science. Having been through their graduate and undergraduate programs I understand why companies refuse to setup in Kansas. Why the hell would you want to pay any tax and potentially deal with substandard employees?
The biggest complaint from then largest employers in Wichita in regards to WSU was the lackluster education programs in engineering and computer science. Having been through their graduate and undergraduate programs I understand why companies refuse to setup in Kansas. Why the hell would you want to pay any tax and potentially deal with substandard employees?
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Income taxes aren't the only form of taxes. Property taxes are staggeringly high in Texas compared to California (though I would argue that California could stand to have higher property taxes since it would help to put a lid on the ridiculously high prices to buy property there).
Property tax rates of 2-3% are common in Texas, while in California, the maximum tax rate is 1% plus a small amount to pay back voter approved bonds (SF currently has a total tax rate of 1.14%). Additionally, in Texas, the taxes are assessed against the full market value, while in California, the assessed value can't rise by more than 2% per year, resulting in many people paying tax on far less than the market value of their property.
Property tax rates of 2-3% are common in Texas, while in California, the maximum tax rate is 1% plus a small amount to pay back voter approved bonds (SF currently has a total tax rate of 1.14%). Additionally, in Texas, the taxes are assessed against the full market value, while in California, the assessed value can't rise by more than 2% per year, resulting in many people paying tax on far less than the market value of their property.
CA roads are notoriously badly maintained, especially in places like the Bay Area, where local taxes are high. (Sales tax in many cities is around 10%.)
It's all about priorities and how your tax $$ are used. Also, Prop 13 in CA has skewed things, and the fact that businesses are exempt from Prop 13. There's been a movement to fix that, but I doubt it will happen.
It's all about priorities and how your tax $$ are used. Also, Prop 13 in CA has skewed things, and the fact that businesses are exempt from Prop 13. There's been a movement to fix that, but I doubt it will happen.
Business are not exempt from prop 13; there are periodically moves to exempt commercial property from some parts of the prop 13 limits (usually not the rate limit, but the limit on tax value increases.)
You're right. I don't know where I read that, but searches have proven you right. Thanks.
I'm not really a conservative, more of a centrist, and I'm totally happy with my taxes going to what you mentioned.
The reality though is that our taxes increasingly go to paying for retirement for state workers (19% - California), welfare (10%), and health care (35%). In other words, a total of 64% of our budget goes to things I will never see a benefit from.
This is what I think the conservatives are railing against - 64% of benefits going to ~10% of the state's citizens.
The reality though is that our taxes increasingly go to paying for retirement for state workers (19% - California), welfare (10%), and health care (35%). In other words, a total of 64% of our budget goes to things I will never see a benefit from.
This is what I think the conservatives are railing against - 64% of benefits going to ~10% of the state's citizens.
> The reality though is that our taxes increasingly go to paying for retirement for state workers (19% - California), welfare (10%), and health care (35%). In other words, a total of 64% of our budget goes to things I will never see a benefit from.
Retirement for state workers is part of their agreed-on compensation for labor provided, so its part and parcel of the labor costs for all the things government does (including all those things that you said you are "totally happy" with your taxes going to), not a separate use of funds.
> This is what I think the conservatives are railing against - 64% of benefits going to ~10% of the state's citizens.
Medi-Cal alone (which isn't all of public healthcare expenditures in California) covers around 12 million of California's 38.8 million population, so that piece of the healthcare component of what you are complaining about reaches far more than "~10% of the state's citizens".
Retirement for state workers is part of their agreed-on compensation for labor provided, so its part and parcel of the labor costs for all the things government does (including all those things that you said you are "totally happy" with your taxes going to), not a separate use of funds.
> This is what I think the conservatives are railing against - 64% of benefits going to ~10% of the state's citizens.
Medi-Cal alone (which isn't all of public healthcare expenditures in California) covers around 12 million of California's 38.8 million population, so that piece of the healthcare component of what you are complaining about reaches far more than "~10% of the state's citizens".
Maybe I am naive, but I personally believe you can benefit from welfare or healthcare, even if you do not get any money directly.
I am quite happy, that some of my tax money is preventing to have multi-resistant tuberculosis, or STDs (or whatever other horror you can imagine) at every corner. Having a basic access to some healthcare is benefiting every one in the long run. Same for welfare, some basic minimum probably prevents some people to kill/rob just to eat. I wonder if that kind of relation has already been quantified.
I would probably be OK with a 20-33% reduction of my income if it was used to provide a universal basic income.
I am quite happy, that some of my tax money is preventing to have multi-resistant tuberculosis, or STDs (or whatever other horror you can imagine) at every corner. Having a basic access to some healthcare is benefiting every one in the long run. Same for welfare, some basic minimum probably prevents some people to kill/rob just to eat. I wonder if that kind of relation has already been quantified.
I would probably be OK with a 20-33% reduction of my income if it was used to provide a universal basic income.
> I would probably be OK with a 20-33% reduction of my income if it was used to provide a universal basic income.
Completely agree. My only stipulation would be that all financial transactions, reporting, etc is openly available to the public online.
I want a strong government providing support to its citizens, but I want it held ruthlessly accountable.
Completely agree. My only stipulation would be that all financial transactions, reporting, etc is openly available to the public online.
I want a strong government providing support to its citizens, but I want it held ruthlessly accountable.
They do pay for that, but in the US in particular it seems like the premium is quite high. I disagree with the conservative position that government in general is grossly inefficient and the smaller the better, etc., however for the US government in particular (mostly at all levels local, state, and federal) I can definitely understand the argument. I disagree with the conservative solution, which mainly seems to be to dismantle government as much as possible, rather than fix it, but agree there is a sickness there. Unfortunately the conservative solution tends to make the problem worse, not better.
Lower taxes, not zero taxes.
The proposed benefits for the average citizen are more money in their pockets.
The answer is: "Who cares about the average citizen?"
The legislators' assumption was that lowering the tax rate (eventually to zero) would bring business to the state.
Ignoring arguments about the validity and applicability of the Laffer curve, what made them think businesses would want to set up shop there when several other states have the same benefit?
Businesses have to attract talent, and underfunding services and schools doesn't make for an attractive state. It is painful to watch how easily the people in charge slide into believing that one simple solution will fix everything. Even the best of ideas and intentions end badly when taken to an idealogical extreme.
Businesses have to attract talent, and underfunding services and schools doesn't make for an attractive state. It is painful to watch how easily the people in charge slide into believing that one simple solution will fix everything. Even the best of ideas and intentions end badly when taken to an idealogical extreme.
Without going into whether this belief is well founded (personally I don't think it is), its a combination of two factors: an assumption that there is a pool of potential business owners already in the state who are deterred by higher taxes, and a desire to be like Delaware (or internationally, Ireland), where low taxes and favorable regulatory structure are such that many large, inter-state or multinational corporations headquarter themselves there.
The first point, as you suggested, is pretty questionable. As you pointed out, it's worth noting that the current wave of entrepreneurship has headquartered itself in California, New York, and Massachusetts, some of the highest tax areas in the country.
The first point, as you suggested, is pretty questionable. As you pointed out, it's worth noting that the current wave of entrepreneurship has headquartered itself in California, New York, and Massachusetts, some of the highest tax areas in the country.
There's a tech boom going on in the Seattle area (Microsoft, Amazon, Google, Adobe, Boeing, etc.), which has no income tax.
It seems like it's going on there more because it is conducive to talented/idea people being there in a big group rather than about tax structure.
Boeing though just built a new facility in another state because of union issues (apparently).
Bottom line is that it's a part of the business decision, but not the only part and maybe not even the biggest part.
Boeing though just built a new facility in another state because of union issues (apparently).
Bottom line is that it's a part of the business decision, but not the only part and maybe not even the biggest part.
Boeing has a new assembly site in South Carolina opened in 2011.
This is especially ironic (and painful) for Kansas since Boeing had been a major employer in the Wichita area for decades. It sold its Wichita Commercial Airplanes division to Spirit AeroSystems in the mid-2000s.
This is especially ironic (and painful) for Kansas since Boeing had been a major employer in the Wichita area for decades. It sold its Wichita Commercial Airplanes division to Spirit AeroSystems in the mid-2000s.
If they were in a Delaware situation, wouldn't they not get many of the secondary and tertiary benefits of the business? Ie, there would be a shell company there, but not many jobs, and therefore not many people's commerce adding to the state's prosperity?
My understanding was that these benefits were what made this sort of thinking work.
My understanding was that these benefits were what made this sort of thinking work.
Your last sentence can really be true in a lot of circumstances.
The overwhelming note of the article was that even at the end of the day practical concerns did override idealism. Although KS has a long way to go and has some huge disadvantages when compared to other states with no income tax - there is a possibility that a zero income tax policy could help the state.
The overwhelming note of the article was that even at the end of the day practical concerns did override idealism. Although KS has a long way to go and has some huge disadvantages when compared to other states with no income tax - there is a possibility that a zero income tax policy could help the state.
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The single minded focus on taxes to recruit businesses strikes me as severely misguided. Sure, found a business here in Kansas where you save on paying high taxes on your business. Pay it all back when your child makes the mistake of enrolling in the University of Kansas system. Perhaps this isn't the specific case in Kansas, maybe the Kansas system has lowered costs, but I have a feeling you pay it back in some form when you finally, in some way start to imbibe on a now underfunded public entity.
The University of Kansas has one of the lowest tuition prices in the country for a state uni. The problem is the overall education you get from the public schools and that there are very few locations to get job, when comparing pay nationally, with decent pay.
I listened to the Planet Money episode last week (of the same title and subject from last year).
http://www.npr.org/sections/money/2014/10/22/358105415/episo...
http://www.npr.org/sections/money/2014/10/22/358105415/episo...
Maybe someday I'll come back to my home state but only when the madness in the state capital has ran its course and actual competent politicians are at the helm. Until then I'll be working up here in Minneapolis Minnesota (even though I hate the traffic and the winter weather... BLEH!).