Kansas’ Tax Plan Makes Racial Economic Disparities Worse

Oct. 14, 2016

Kansas’ tax shift since 2012 has been a bad deal for many taxpayers. It’s been an even worse deal for families of color struggling to make ends meet. When broken down by race and income levels, a disproportionate rate of low- to moderate-income Kansans of color saw their state taxes increase, while big tax cuts to the top one-fifth of earners benefited white Kansans at a rate two to three times bigger than their black and Latino counterparts.

The current tax plan, which cuts state income taxes for wealthy Kansans and eliminates many tax credits for low- to moderate-income taxpayers, is an unfair system that hinders progress toward achieving economic equity for all Kansans, especially lower income Kansans of color.

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An analysis by the Institute on Taxation and Economic Policy (ITEP) shows that all tax policy changes from 2012 to the present actually increased taxes on the bottom 40% of earners in Kansas, or those earning $42,000 a year or less. When the bottom 40% of earners is broken out by race, disproportionately more Kansans of color saw their taxes increase than did white Kansans.

Of working adults – ages 18 to 64 – nearly 62% of white Kansans saw a net tax increase due to the increase in sales tax and elimination of certain tax credits that benefit low-income families. That rate is much higher for Kansans who are black (75%) and Latino (83%).

This will make it nearly impossible to close the racial gap in individual median income for full-time, year-round workers. According to most recent Census data, those earnings stand at $43,816 for white Kansans, and $32,653 and $29,584 for black and Latino Kansans, respectively.

What exacerbates this trend is that wealthy Kansans who saw the biggest tax cut are mostly white. Indeed, the rate of white Kansans in the top tier of earners is two to three times that of black and Latinos in the highest earning tier.

While some higher income Kansans benefited from the tax plan that has thrown the state budget into disarray, a great many other hard-working folks saw their tax bill go up as credits were eliminated and sales taxes were hiked. Kansans of color have dealt with more economic distress under the unbalanced direction of tax policy – taking an equitable future for all Kansans off the table.

ClayKansas’ Tax Plan Makes Racial Economic Disparities Worse