Hope you had a good time this year coming up with an additional $591 million in Kansas individual income tax, the income tax increase lawmakers approved over the veto of Gov. Sam Brownback back in June.
That income tax increase we’ll be mailing into the state on April 17 — the deadline for the current tax year — was, remember, just a stutter-step, in which the full income tax increase was trimmed just a bit below the rates you’ll pay for the year starting Jan. 1.
That stutter-step? Well, the three brackets (up from the two brackets of the discarded Brownback tax plan of 2012) for marrieds-filing-jointly are:
• With $30,000 or less in taxable income, 2.9 percent for this tax year and 3.10 percent for tax year 2018.
• With $30,000 to $60,000, 4.9 percent for the current tax year and 5.25 percent for tax year 2018.
• With more than $60,000, 5.2 percent for this tax year and 5.7 percent for tax year 2018 and after.
Yes, that second year, which starts just after you’ve downed the New Year’s Eve toast and officially stepped into 2018, sees rate increases that are predicted to boost this year’s $591 million in tax revenue to $633 million.
Now, the nice thing about New Year’s Eve parties is nobody except probably accountants are doing much in the way of calculation. Just having a good time.
But that party where we celebrate the tax increases being over probably isn’t going to last, largely because the Kansas Supreme Court tossed out as unconstitutional this year’s new school finance bill, ruling it doesn’t send enough money to public K-12 schools to guarantee schoolchildren from border to border access to a good education at roughly the same expenditure per pupil.
The court didn’t put a price tag on just what it will cost to meet that adequate standard on school finance, but few wandering the Statehouse corridors are expecting a price tag of less than $400 million to $600 million. The real issue appears to be whether the Legislature can boost that funding in just one year, or whether the court will approve a maybe two-year phase in of that additional money which the state doesn’t have.
Which, of course, opens that Pandora’s box of just where the money would come from, or, more politically accurately, from whom that money would come.
There are those among us whose scalps can reflect sunlight glare into others’ eyes who believe those folks who pay for haircuts probably aren’t paying enough. Or those who wonder why farmers don’t pay sales tax on those giant air-conditioned tractors they buy. Or why tax accountants can’t figure how to collect sales tax on their work product.
Now, of course, the state could cut spending on nearly everything else to free up money for a boost to schools, but then what do you want to cut? Not many pretty choices there, are there.
But there are some new numbers for potential tax increases to boost revenues, and they become part of the discussion to raise more money.
Interested in a little more income tax? Raising the rates that will be in effect Jan. 1 (3.10 percent, 5.25 percent and 5.70 percent) by 0.75 percent (to 3.85 percent, 6 percent and 6.45 percent) would likely raise approximately $613 million.
That simple? Well, the mathematics are simple, but running for re-election after two years of income tax increases? Pretty tough.
Raising the sales tax? Well, you can do the math if a 0.1 percent increase — from 6.5 percent to 6.6 percent raises approximately $46 million — just pencil out how much you want.
Something to think about at that New Year’s Eve party.
Syndicated by Hawver News Co. of Topeka, Martin Hawver is publisher of Hawver's Capitol Report.