May 31, 2015

Preliminary analysis: Brownback tax “fix” results in net tax hike for 40 percent of Kansans

TOPEKA – With the 2015 Kansas Legislative Session now exceeding the 100-day mark, Gov. Sam Brownback yesterday repackaged his proposal to solve the budget crisis created by his 2012 tax plan. The Governor provided no data from the administration outlining the impact of the tax plan on specific wage brackets, but he said his latest tax proposal is designed to “make significant effort” to share tax relief with low income Kansans. Preliminary analysis by the non-profit, non-partisan organization Institute of Taxation and Economic Policy (ITEP), however, indicates the Governor’s latest plan leaves the poorest 40 percent of Kansans left-behind.

“Tax policy is complex and impacts every segment of our economy,” said Annie McKay, Executive Director at the Kansas Center for Economic Growth. “That’s why it is so important for decisions about our tax code to be driven by data. The data does not support Gov. Brownback’s claims. In fact, data indicates the Governor’s proposal not only fails to fix inequalities of his 2012 tax plan, it actually appears based on initial analysis that low-income Kansas families will see tax hikes.”

The Governor trumpets income tax reductions for 338,000 low income Kansans, despite this provision being the smallest fiscal provision of the entire package. In reality, preliminary data indicates that any income tax relief Brownback touts in his proposal is immediately consumed by the dramatic sales tax hike he also proposes resulting in a net tax increase for 40 percent of low and middle income Kansans. Unfortunately, without legislative language from the Administration about what their plan specifically does, the final impact is still undeterminable. In other words, the latest proposal is asking the Kansas Legislature to repeat 2012 mistakes, proposing dramatic changes to the Kansas tax code without identifying specific statutory changes or data to show the impact those changes will have.

“In 2012, data warning the consequences of Governor Brownback’s tax plan was widely available but went largely ignored. Lawmakers across the political spectrum now openly admit that mistake; even the Governor acknowledges his plan isn’t working as he promised it would,” said McKay. “But we can’t fix the problem using the same, flawed approach that got us into this mess in the first place. If the Governor’s goal is to fix the fundamental inequalities in his tax policy and ease the burden on low income families, his latest plan wholly fails to accomplish that objective.”

The Institute on Taxation and Economic Policy (ITEP) is a non-profit, non-partisan research organization based in Washington, D.C. that works on federal, state, and local tax policy issues. ITEP’s Microsimulation Tax Model allows it to measure the distributional consequences of federal and state tax laws and proposed changes in them, both nationally and on a state-by-state basis.

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ClayPreliminary ITEP analysis: Brownback tax “fix” results in net tax hike for 40 percent of Kansans