Topeka Kansas Democratic Party Chairwoman Joan Wagnon, who is also a former secretary of the Kansas Department of Revenue, said Thursday she is alarmed at the proposed tax cutting bill that has been endorsed by Gov. Sam Brownback, a Republican.
Wagnon said the $2.9 billion tax cut over six years will rob funds from schools and other services while delivering a windfall to wealthy businesses including Kansas-based Koch Industries.
"Certainly the public would not believe this tax break should be targeted to one of the largest and wealthiest businesses in our state," Wagnon said in a statement delivered to the House-Senate tax conference committee that is working on the bill.
The proposed bill would decrease state income tax rates and exempt non-wage business income, which will affect nearly 200,000 businesses formed as limited liability corporations, chapter S corporations and sole proprietorships.
Brownback and other supporters of the tax cut say it will boost the economy and create jobs.
Wagnon, who served as revenue secretary under former Gov. Kathleen Sebelius, a Democrat, said there are 38,000 limited liability corporations that would be affected. She said she did a search of the Kansas secretary of state's databases and found 24 business entities related to Koch Industries that are LLCs and would be affected by the proposal. All of the companies are based in Wichita.
"Of course, I have no way of knowing the tax impact of this change on their business. But, their filing status is public, and definitely included in this bill as it stands now," she said.
Wagnon also criticized other parts of the tax-cutting package that would eliminate tax credits for child day care and a provision that would require low-income families who now quality for both the Earned Income Tax Credit and food sales tax rebate to pick one and not benefit from both.
"Again, limiting lower income earners to either the EITC or the food sales tax rebate seems to take from those less able to pay in order to fund a tax break for the LLC's (Koch included!)," she said.