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Federal tax changes could have detrimental effect on Missouri funding of public education

Education advocates urged to contact United States senators, representatives and President Bush's office to ask elected officials to consider impact of federal tax changes on states' budgets

State education funding has already been reduced drastically during the 2002-03 state budget year, and the Missouri General Assembly has approved a 2003-04 budget that slashes $224 million from public school funding. For the R-7 School District, this state reduction would mean a loss of $4.6 million in state funding for the 2003-04 school year. In addition, the Lee's Summit School District lost $4.3 million over the past two years due to state cutbacks and problems with the Jackson County assessment department. Total losses over the past two school years combined with the forecasted state loss for next year would be almost $9 million for R-7 schools. 

Missouri education advocates are also closely monitoring efforts in Washington, D.C., to cut federal taxes. Some of the proposed federal tax changes would have a negative impact on our state's already strapped budget. States use the adjusted gross income on federal tax returns as the starting point for calculating state income tax. If the federal gross income figure is reduced, this could lower Missouri's revenues from state income  taxes.

Of concern is the proposed reduction or elimination of the federal tax on corporate dividends paid to shareholders. The U.S. Senate and President George Bush have proposed eliminating the dividend taxes. If this were to happen, Missouri officials estimate that our state would lose between $50 million and $100 million. A proposal from the U.S. House of Representatives would be less crippling to states. The House-passed legislation would tax dividends as capital gains rather than as ordinary income, while lowering the capital gains tax rate. The House legislation would not affect the collection of the states' income taxes. 

 Another concern is the federal move to end the so-called marriage penalty. Discussion in Washington, D.C., initially set this phaseout to begin in 2005, but President Bush has recommended that the phaseout be moved to the current tax year. Missouri officials have stated that if the marriage tax change begins during the current tax year, Missouri could lose another $90 million. 

Concerned parents and other citizens are urged to contact their U.S. senators and representatives and President Bush's office to encourage our elected officials to carefully consider the impact of any changes in the federal tax law on our already financially strapped states' budgets. Contact information for our federal elected officials is listed at the bottom of this e-mail.

In addition, education advocates are urging our federal elected officials to approve a plan that includes a federal aid package for states. A Senate plan included $20 billion for states, which would result in approximately $376 million for Missouri. The House of Representatives proposal did not contain any federal aid for states. The aid for states proposed in the Senate plan would offset losses from the federal tax reform for at least one year while also helping the states meet their obligation to public education and other areas.

Additional information on the Missouri budget crisis and its impact on the Lee's Summit R-7 School District is available at the R-7 web page at www.leesummit.k12.mo.us and then select "State Budget Crisis".

           

Forwarded by Larry Swickard/Instruction/LSSD on 05/23/03 12:21 PM

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Dr. Gibson,

    As a rule I don't respond to informational e-mails. However, in this case I feel I must as this particular communication amounts to politicking in favor of political point of view. Not only that, this politicking is urging me respond in a specified way.

     I do plan to write to the elected officials on the list at the end of this e-mail. However, with all due respect, it will not be to reconsider voting against the tax cuts referred to in the e-mail. It will be to advise them to cut taxes even more.

    The reason our economy as a nation is in trouble is because of government spending. Taxes are at an all time high and not only crowd out investment, they punish those who work hard and save for their future and that of their children. But the real issue isn't whether taxes are too high or too low. The real question is whether the programs the American people are taxed to fund are even legal under the Constitution. Until that question is addressed, the debate over how high or how low cannot even be discussed.

The reason so many in government, especially the Democrats, oppose tax cuts is because it takes power away from them. The power to tax, is the power to control the lives of men. The power to tax is the power to dole out largesse and receive votes and power in return. This is why our Founding Fathers created a limited government. The national government is limited by an enumerated list of powers in Article I, Section 8 of the Constitution. The Tenth Amendment states that all powers not expressly delegated (enumerated or listed) in the Constitution, nor prohibited it by the Constitution, belong to the States or the people. In other words, the national government may tax and spend only for purposes enumerated in Article I, Section 8.

    Education is not a federal issue, it is a state issue. Who says so?  The Constitution does. There is no way possible to interpret the Constitution as to support the taking of money from people of the various states to pay for education of those in one state. We are in trouble because we have come to depend on educational largesse from Washington rather than depend on the funds we raise within the state. Of course, some people would be horrified by what I have written. The very idea of people having to pay themselves for services they receive is anathema to them.  Welcome to the "welfare state." Missouri, like other states, had no problem with national legislators violating the Constitution by spending on education because they all received a percentage of the goodies.

     Dividends, and I own none, are taxed twice. They are taxed when the corporation, which is owned by the share holders, earns a profit and then those very same dividends are taxed when the profits are shared with stock holders. This is double taxation. Not only that, it punishes investment and those who work hard. People buy shares to earn money for their future which includes retirement and their children. When government taxes these heavily, which it does, people transfer such monies to tax sheltered instruments. This reduces the net amount the government receives from taxes but there is a more serious result. Businesses, those that employ so many Americans, receive less money for retooling, expansion, and so forth. In this situation, American companies are at a distinct disadvantage when it comes to modernization to compete with foreign companies. And, once again, it punishes those who work hard when the greedy hand of government, which has contributed nothing to a person's success from hardwork is always waiting to take a cut.

     The "so-called" marriage penalty is not so called. It is a fact. Two people shacked up and having kids can file separate tax returns and hence pay less in taxes than those who are married. This not only punishes those who are married, it is a disincentive to get married. Do we need more of that in our society?  

     Finally, instead of lamenting the current state of affairs, we should be celebrating. It is a wake up call to get our house in order. But, for far too long, those who have access to and control over the taxpayer's money have spent it recklessly and cavalierly. They never stop to consider that every single penny that goes to Washington, an American has worked for it.

       I am reminded of a famous Congressman by the name of Davy Crockett who, when asked to vote for largesse that the Constitution did not permit, stated of his colleagues, "Money with them is nothing but trash when it is to come out of the people. But it is the one great thing for which most of them are striving, and many of them sacrifice honor, integrity and justice to obtain it."

     I did not write this to offend or antagonize. But, I can't not respond when I receive politically motivated e-mails asking me to do something I don't agree with, violates my principles, and violates the Constitution of the United States. The same Constitution I am supposed to teach my students to respect, revere and obey.

Respectfully,

Larry Swickard

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Jacques Tucker's comments:

Should the LSSD Administration; the NEA; the AFT; et al. wish to have state funding for education not be contingent on federal tax laws, ask the Missouri legislature to modify the state income tax laws.

Further, to create competition in providing education in Missouri a voucher system  would give parents the choice of school or even home schooling for their children.  

Two perhaps pertinent questions: How much does the LSSD now spend per student?  How many assistance principals does each high school require?

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