March 20, 2017
Flat tax plans under consideration by lawmakers would generate only a modest amount of revenue in comparison to the state’s long-term budget shortfall or, in the case of one bill, would decrease the amount of tax dollars coming into the state.
A bill that would tax income at 3.9 percent while also once again taxing some pass-through business income would generate an additional $25 million next year and about $82 million the year after.
A second bill would tax income at 5 percent but would exempt income of less than $10,000 for individuals or $20,000 for married couples. Kansas would lose about $83 million next year and $64 million the year after, according to a financial analysis by the state budget office.
Kansas faces a budget shortfall of $1.1 billion over the next two years.
At a hearing in the House Tax Committee on Monday, the two bills drew relatively little public interest.
“If there’s any support for the proposals, we should have seen some modest element of support in committee,” said Rep. Steven Johnson, R-Assaria, who chairs the committee. “And the fact that there was a complete lack of support makes it hard to see a path forward.”
No one spoke during the hearing in favor of either bill. The Kansas Chamber of Commerce was neutral on the 3.9 percent bill, noting concerns about changes to taxes of business income.
The Kansas Center for Economic Growth spoke in opposition to both bills, arguing they wouldn’t raise the revenue needed to return Kansas to fiscal stability.
“Supporters didn’t come up here clamoring for it,” Rep. Tom Sawyer, D-Wichita, the ranking minority member of the committee, said of the two bills.
Some conservative lawmakers have said they are developing a flat tax proposal centered on a rate of 3.9 percent. Gov. Sam Brownback’s administration has also said he would be willing to consider a flat tax.
Read more from the Wichita Eagle here.