Topeka — The Kansas Senate on Tuesday gave preliminary approval to proposed tax cuts after rejecting major portions of Gov. Sam Brownback’s tax overhaul.
“There may be enough of this carcass left,” said state Sen. Les Donovan, R-Wichita, who touted Brownback’s plan but then saw amendments approved that dismantled it.
Brownback, a Republican, has proposed reducing income tax rates and eliminating taxes for thousands of businesses. To offset those cuts, he wants to keep the state sales tax at 6.3 percent. But the Senate voted 29-11 to drop the sales tax to 5.7 percent next year, as current law requires.
Brownback’s plan would also eliminate many popular tax deductions, such as mortgage interest and charitable contributions. But the Senate voted 21-19 to put those and numerous other deductions back in.
Supporters of Brownback’s plan said the amendments passed by a bipartisan group were designed to kill the governor’s proposal.
“It’s disgraceful,” said state Sen. Julia Lynn, R-Olathe. “This body has systematically and deliberately picked apart a bill that is meant to address serious issues in our state. It’s not a joke.”
Brownback’s proposals will jump-start the economy and create jobs, supporters said.
But several legislators voiced disapproval of Brownback’s desire to keep the sales tax at 6.3 percent. The rate was approved in 2010 as a temporary hike to get state government through revenue declines during the recession and then go down to 5.7 percent on July 1, 2013.
“People are watching us to make sure we keep our promise,” said state Sen. Carolyn McGinn, R-Sedgwick.
But several senators who voted against the sales tax increase in 2010 voted to keep it higher now because they said the extra revenue was needed to reduce income tax rates. State Sen. Ty Masterson, R-Andover, said, “I will oppose anything that inhibits our ability to buy down rates.”
Supporters of Brownback’s tax plan also accused those who were changing it of “Christmas treeing up” the bill by adding measures that would make it impossible to implement because it would cut too much revenue.
The Senate proposal would continue Brownback’s plan to cut income tax rates and eliminate taxes on nonwage income for thousands of businesses formed as a limited liability corporation, chapter S corporation and sole proprietorship.
Senate Democratic Leader Anthony Hensley of Topeka said eliminating those business taxes was a major flaw.
“How is it fair that ‘Charlie Lunchbucket’ is going to continue paying income tax but a business with nonwage income won’t?” Hensley asked.
But state Sen. Susan Wagle, R-Wichita, said: “You have to take the job creator and give him a break.”
A final vote on the Senate plan will likely occur Wednesday. If approved, the measure will probably end up in a House-Senate conference committee. The House has approved a tax plan that contains some of Brownback’s proposal but added removal of the state sales tax on groceries, which would reduce revenue by more than $300 million per year.