Topeka A sweeping package of tax cuts was approved by the Kansas House on Wednesday despite misgivings about its cost and the breaks offered to wealthy residents, though it's expected to get a cold reception in the Senate.
Supporters believe the plan is a step toward tax relief and job creation, but critics argue that some provisions favor the wealthy and businesses. Others maintain that the state can't afford the plan's price tag, estimated between $375 million and $425 million.
The legislation, approved 68-56, is the second tax-break plan that the House has passed in two years. Last year's plan languished in the Senate, never coming to a vote, and a Senate committee on Wednesday endorsed a separate income tax plan offered by Republican Gov. Sam Brownback with minor changes.
House Speaker Mike O'Neal was confident that some form of tax relief would pass the Legislature this session. But the Hutchinson Republican predicted the final plan's cost would be far less that outlined in the House plan.
The House plan would lower the tax rates in all income brackets and require any growth in state revenue above 3 percent to be used to cut taxes further. It also keeps in place popular income credits and exemptions, including the earned income tax credit for low-income tax filers.
It would also phase out earnings taxes for thousands of partnerships, sole proprietorships and other small businesses. The sales tax rate would drop to 5.7 percent from 6.3 percent in July 2013, as previously scheduled.
The elimination of sales taxes on food would cost the state an estimated $350 million annually. Supporters of the provision said it was another way to give Kansas residents more disposable income for other purposes.
They also said the changes would create jobs.
Brownback has pushed cutting tax rates as a top goal of the 2012 session as he seeks to revive the Kansas economy. He proposed a similar income tax bill that House members reviewed and sampled in drafting their own package.
Brownback spokeswoman Sherriene Jones-Sontag said the administration's policies to create jobs have been taking hold, evidenced by a report earlier Tuesday that said Kansas added 22,000 jobs in the past year.
Critics called the policy misguided, saying that the effects would leave Kansas government with fewer resources to function.
"It would be nice if we could look the people of Kansas in the face and tell them we could get rid of their income tax without having any consequences," said House Minority Leader Paul Davis, a Lawrence Democrat, "but the fact of the matter is, this is going to disable funding for schools, universities, public safety and a lot of things Kansans depend upon from state government."