Archive for Tuesday, March 8, 2011

House Tax Committee discussing proposal for reductions to Kansas Earned Income Tax Credit

March 8, 2011

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— A proposal to reduce the Kansas Earned Income Tax Credit would throw thousands of working families into poverty, religious and social service, advocates said Tuesday.

“This bill takes us backwards,” said Gary Brunk, an official with Kansas Action for Children.

House Bill 2347 would reduce the amount of the tax credit from the current 18 percent of the federal Earned Income Tax Credit to 5 percent when fully phased in.

It would also make the credit nonrefundable, meaning that if a family’s tax credit was higher than their tax liability, they would have their liability paid off but would no longer get a check for the difference. Currently, the full credit is refundable as a way to offset the regressive nature of sales taxes paid by low-income families.

The EITC is touted by advocates as one of the most effective anti-poverty programs going.

But state Rep. Terry Calloway, R-Pittsburg, said he proposed the bill because Kansas’ EITC was more generous than most states that offer it.

“It looked like we were out of proportion to the region and out of proportion to the national average,” Calloway told the House Tax Committee.

Testimony during the committee meeting indicated the state could save $56 million by reducing the EITC. But officials from the Kansas Department of Social and Rehabilitation Services said $29 million of that would have to go back to the agency to maintain required funding levels to attract federal dollars for programs that help the poor.

Jan Lewis, president and chief executive officer of Catholic Charities of Northeast Kansas, said it didn’t make sense to reduce a tax credit for low-income families when the state would be forced to use the savings to fund programs for many of those same families.

Rep. Mario Goico, R-Wichita, agreed, saying it was better for the families to get the money directly through the tax credit instead of making them “more dependent on the state.”

Advocates estimated that more than 90 percent of Kansas’ EITC dollars go to families with children, and the average credit is about $360. Without the credit, 6,500 Kansas families would have their income drop below the poverty line. An additional 128,000 Kansans already in poverty, including more than 50,000 children, would be pushed deeper into poverty.

Tax Committee Chairman Richard Carlson, R-St. Marys, said he didn’t know yet whether the committee would work on the bill.

Comments

sierraclub 6 years, 7 months ago

Without this entitlement, I would have to use my cig or beer money....please, do not get rid of my entitlements.....does this mean, I would actually have to get a job?

Jonathan Becker 6 years, 7 months ago

You only get the EIC if you have a job. Quit demonstrating your lack of understanding of tax policy.

Phillbert 6 years, 7 months ago

Tax exemptions and credits for businesses are sacred and can't possibly be touched, but tax credits that encourage people to WORK and stay off welfare are on the chopping block. Insane.

Keith 6 years, 7 months ago

Millions of dollars in giveaways for the rich, but not one penny for the poor. The GOP needs to change their mascot from the elephant to Scrooge.

notanota 6 years, 7 months ago

Are there no prisons? Are there no workhouses?

average 6 years, 7 months ago

"“It looked like we were out of proportion to the region and out of proportion to the national average,” Calloway told the House Tax Committee.

Um... that's because most other states either exempt cook-at-home food from sales tax or tax it at a substantially lower rate. So our compensatory EITC was higher for the poor. That was the whole idea.

Fossick 6 years, 7 months ago

So, we can dump both the EITC and the food sales tax and everyone will be happy, right?

Jonathan Becker 6 years, 7 months ago

Just when I think there is nothing dumber that can emerge from Topeka, I am proven wrong.

And the given reason for this change is not financial policy or tax policy. The reason is because other states don't do it the way Kansas does. If other states pass a law saying it is legal to piss on a legislator named Tim Calloway, would Calloway propose such a bill? Methinks not.

Bob_Keeshan 6 years, 7 months ago

Funny, the Kansas income tax is also more generous than most states that offer it. The upper bracket starts at a ridiculously low level. Where is Rep. Calloway's proposal to fix that?

Kansas also has sales tax exemptions that are more generous than most states that offer them. No proposal?

I bet she is full throated in her support for eliminating the odious corporate income tax, though.

The Kansas GOP -- raise taxes on the poor, cut taxes for corporations.

Mike1949 6 years, 7 months ago

Like all the Republican governors elected, there seem to be a pattern. Tax cut on businesses, tax the middle class and the poor to pay for it. Employment in Kansas is looking worse all the time. Great for business, but business is going to have a hard time finding people to work for nothing. Oh, they are going to ship in people claiming they are creating job when in reality they aren't. They are just giving everyone a pay cut and taxing them more so it appears that they are creating jobs. More smoke and mirrors from the republicans!

twicker 6 years, 7 months ago

There is a pattern, Mike1949. Calloway was backed by the same people who backed the new Republican governors, the group Americans for Prosperity and the Koch Brothers. The Wisconsin and Michigan governors are cutting taxes for the rich and the corporations, taxing the poor, busting unions and increasing their own political power. In Michigan they created a financial martial law that permits them to get rid of any elected official and even dissolve towns.

This is obviously a game plan. There is a war on the poor and middle class.

KSManimal 6 years, 7 months ago

We can't raise taxes on corporations or the wealthy, because that would hurt the economy. Right-wingnut solution? Raise taxes on the working poor.

No doubt this tax-bracket is disproportionately female (single, working moms). GOP misogyny at its finest.

ps - if your earned income arrives primarily as $1 bills, we're gonna legislate your job out of existence; so you don't need to worry about this tax increase.

notanota 6 years, 7 months ago

Now, now. Poor people don't have important jobs, and even if they work their fingers to the bone, they're less worthy of our love than people who sit in offices all day and press the number pad on their keyboard.

William Weissbeck 6 years, 7 months ago

When we reach a point in our society when we have to cut services to what we yesterday defined as the poor, then we have stopped being an organized society. We have returned to the jungle. I have often said that nowhere in the Bible are we permitted to judge the poor. It doesn't say, blessed only are the hard working (non smoking, non drinking) poor.

notanota 6 years, 7 months ago

I seem to recall something about "What ye do to the least of ye, ye do to unto Me."

Bob_Keeshan 6 years, 7 months ago

Worth noting that the low income Kansans who qualify for this credit still pay a considerably higher percentage of their earnings in taxes than those Kansans who do not qualify.

Kansan families that make less than $19,000 a year pay about 9.2 percent of their income in taxes. The richest families making more than $424,000 pay 7.1 percent of their incomes in taxes. If you then take into account federal deductions, the poorest still pay about 9.2 percent in taxes and the richest pay 5.9 percent in taxes.

But yeah, EIC is a bad idea.

voevoda 6 years, 7 months ago

This proposal looks like an inverted Robin Hood: Take from the wretch and give to the peer. Instead, why not raise the tax rate on Kansans earning more than half a million a year, and make up the budget deficit that way?

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