New Kan. tax plan has boost to poor
TOPEKA (AP) -- Republican Gov. Sam Brownback's latest proposals on income taxes benefit Kansas' poorest taxpayers more than its wealthiest and help offset changes made last year that were weighted toward top earners, an internal Department of Revenue report said Wednesday.
The department prepared the report just ahead of a House Taxation Committee hearing on Brownback's proposals to further cut individual income tax rates after aggressive reductions last year. The governor's goal is to eventually phase out personal income taxes, but he and lawmakers also must stabilize the budget, so he's proposing to eliminate two popular income tax deductions for homeowners.
The department's figures show that those changes would reduce the collective income tax burden of tax filers with adjusted gross incomes of $25,000 or less by 41 percent for 2017. Other groups of taxpayers would see smaller overall reductions, with a collective cut of 39 percent for those earning more than $250,000.
The proposed income tax changes are weighted even more toward the poorest taxpayers before 2017, delaying their biggest benefits for the wealthiest taxpayers until that year, according to the department's analysis. That's in contrast to last year's income tax cuts, which resulted in the top earners getting the largest percentage decrease in their collective tax burden.
The department released the report to the Kansas Legislature's research staff and to key legislators, providing a copy to The Associated Press before formally making it public.
"It's more balanced," Revenue Secretary Nick Jordan told The Associated Press during an interview. "We're trying to take a balanced approach. Obviously, we're trying to go to zero for everyone and grow the economy through doing that."
But the new figures may not quiet the debate over Brownback's proposals and his push to phase out individual income taxes as measures that will favor the wealthy more than the poor or middle-class.
First, the analysis does not deal with a proposal from Brownback to keep the sales tax at its current 6.3 percent rate, rather than letting it drop to 5.7 percent in July. That decrease was scheduled in 2010, when the state boosted the tax to balance its budget under Brownback's Democratic predecessor.
Secondly, when last year's tax cuts are factored in, income tax filers earning more than $250,000 still make out the best in the long-term, with a decrease in their collective burden of 60 percent for 2017. However, the poorest taxpayers would see their burden drop 51 percent -- and the gap between how they and the wealthiest taxpayers fare would narrow considerably from the changes made last year.
Democrats oppose canceling the sales tax decrease, and they and even some Republicans have misgivings about Brownback's proposals to bolster the budget by eliminating income tax deductions for the interest Kansans pay on home mortgages and the property taxes on their homes.
"We can always undo some of what we did last year," said Rep. Tom Sawyer of Wichita, the ranking Democrat on the House Taxation Committee.