April 6, 2017
Think tanks and interest groups across the political spectrum denounced a flat tax bill that failed in the Senate on Thursday and had been endorsed by Gov. Sam Brownback and Senate leaders.
Senate Bill 214 would have instituted a flat income tax rate of 4.6 percent in an effort to help fill the $1 billion budget hole looming in the next two years. The bill would have raised an estimated $295 million in 2018 and $357 million in 2019. It failed 37-3.
The Kansas Chamber of Commerce and the Kansas chapter of Americans for Prosperity opposed the bill because it would raise the income tax rate for taxpayers on the low end of the earning spectrum.
Jeff Glendening, state director of Americans for Prosperity Kansas, urged legislators to reduce spending instead of shifting the burden to Kansans.
“Asking Kansas wage earners and job creators to pay higher income taxes and more in targeted sales taxes on tobacco and alcohol products is not the answer to the state’s spending problem,” Glendening said in an email. “Legislators should wait until the new estimates are released in April and then make the necessary budget reductions to fill the gap.”
He was referring to updated state revenue projections that will be released April 20.
Eric Stafford, vice president of government affairs for the Kansas Chamber, said his organization doesn’t view this bill any differently than others that raise taxes.
“From the Chamber’s perspective, we’ve maintained our opposition to the tax increase and any tax increase that targets small business, especially retroactively,” Stafford said.
The Center for Budget and Policy Priorities, based in Washington, D.C., also opposed the flat tax, saying it would harm income inequality.
“Much of the sharp revenue loss from the Governor’s tax cuts resulted from a steep cut in the income tax rate from 6.45 percent to 4.6 percent, so raising the state’s top rate is a key step back to fiscal sanity,” Jacob Kaufman-Waldron, a communications associate with CBPP, said in an email. “But the bill would retain the 4.6% rate and raise only $295 million next year, far short of the 900 million budget shortfall the state faces.”
A statement from the Kansas Center for Economic Growth agreed the bill would be detrimental to lower-income Kansans and argued it would hurt the state’s economic growth.
“Communities across Kansas are already struggling to fund education, keep roads and bridges well-maintained, and make needed investments in public safety and health care. A flat state income tax would undermine our ability to invest in things, like schools and parks, and would sabotage future economic growth,” Heidi Holliday, executive director for the group, said in the statement. “Tax policy should encourage economic activity and shared prosperity, not stifle it. A flat tax is unaffordable and does not solve Kansas’ budget woes.”
Read more from the Topeka Capital Journal here.