Topeka — A sweeping plan to reform the Kansas income tax code should get a favorable reception Thursday when legislators get a full briefing on the proposal, the chairmen of the legislative tax committees said.
Revenue Secretary Nick Jordan, a former Republican state senator, will share details of Gov. Sam Brownback's proposal to a joint meeting of the House and Senate tax committees.
Brownback wants to reduce the income tax rates for individuals and some businesses to stimulate economic growth, a plan that the second-year governor hopes leads to elimination of the tax altogether.
The plan ends 23 tax credits, as well as exemptions and itemized deductions, including the earned income tax credit for low-income residents. The changes would begin in calendar year 2013 and be reflected in taxes filed in April 2014.
Senate tax committee Chairman Les Donovan, a Wichita Republican, acknowledged that parts of the plan are likely to spark opposition but added, "There are a lot of reasons for people to like it, also."
"Of course, there's a lot more details that will come forward, but overall I think it's a step — a giant step — in the right direction," he said. "The way we've been going for the last decades hasn't been working that well, so we've got to give it another direction."
House Taxation Committee Chairman Richard Carlson, a St. Marys Republican, said he believes Brownback's approach will promote economic growth.
"We have to grow the economy and grow jobs in Kansas and improve personal income in the private sector," Carlson said. "I think simplifying the tax system and reforming it and going to flat, lower rates and reducing over time through increased growth in government is the right direction to go for all Kansans to prosper."
He added: "I like very much what I see in the plan."
Democratic leaders struggled with the details, saying not all of them were clear from Brownback's address. They said they don't want to shift the state's tax burden from corporations and wealthier residents to poor and working-class families — and they believe Brownback's plan will do that.
They were particularly critical of his proposal to eliminate the income tax deduction for mortgage interest payments, saying it could suppress home sales. They also oppose elimination of the earned income tax credit, which they said provides more than $60 million in relief to poor workers' families.
"We need tax fairness," said House Minority Paul Davis, a Lawrence Democrat. "If we're going to be shifting the burden of funding government from wealthy taxpayers and corporations, businesses, onto working Kansans, that is wrong. I think we need to look at this plan very carefully and, if that's what it does — it certainly looks that way so far — I don't think people are going to react to it very well."
Senate President Steve Morris, a Hugoton Republican, reacted cautiously, saying the plan's complexity is one reason he appointed a special task force to study tax issues. He called Brownback's plan "very bold" without endorsing it.
"We have a couple of senators with their own tax plans," he said. "Taxes are so important. They effect the daily lives of every Kansan, and I think it's important to have public input and evaluate these — in other words, look before you leap."
Anti-tax organizations were quick to give the proposal passing marks.
Ashley McMillan, president, Kansans for No Income Tax, said the plan would promote small-business in every county by eliminating their tax burden.
"His plan immediately gives every working Kansan a pay raise," she said.
The Kansas Chamber, whose political action committee is targeting Morris and other senators who have supported tax increases in the past, said the reforms signal "Kansas is open for business."
"Kansas simply cannot shed private sector jobs as it has over the last decade. Kansas had fewer private sector jobs in 2011 than it did in 2001. This is a direct result of a failed 'tax and spend' model propagated by previous administrations," said Chamber president Kent Beisner.