Topeka One day before a potential vote on a mammoth tax-cut endorsed by Gov. Sam Brownback, a national tax study group said the proposal would increase taxes on many low- and middle-income Kansans.
The proposal, which may be debated Wednesday by the Senate, "would provide substantial tax cuts for the best off Kansans while actually increasing taxes on many low-income taxpayers because of cuts in low-income credits," according to the analysis by the Institute on Taxation and Economic Policy.
The Washington, D.C.-based ITEP is a non-profit, non-partisan group that works on state and federal tax policy, focusing on tax fairness.
Brownback, a Republican, has been pushing hard for the tax cuts, saying they will stimulate the economy and help Kansans across all income levels.
The proposal would reduce individual income tax rates and exempt 191,000 businesses from taxes on non-wage income. It would also follow current law by allowing the state sales tax to decrease from 6.3 percent to 5.7 percent next year.
ITEP said the income tax reduction and elimination of the tax on pass-through business income would reduce state revenue by $600 million annually.
The proposed cut, put together by Republicans on a House-Senate tax conference committee, would eliminate many credits and deductions aimed at helping low- and middle-income Kansans. For example, the plan would repeal a tax credit for low-income renters and require low-income filers to claim either the food sales tax rebate or the Earned Income Tax Credit.
The poorest 40 percent would see a tax increase because of the loss of credits, ITEP said. The bottom 20 percent earning less than $20,000 per year, would see a tax increase of $86 on average, according to ITEP. Meanwhile the top one percent will receive an average tax cut of $19,771, the group said.
The report's findings echoed comments by state Rep. Nile Dillmore of Wichita, the ranking Democrat on the House tax committee.
In a speech to the House on Monday during a procedural vote, Dillmore said the proposed tax cut was unfair and intellectually dishonest because it would "create a class of economic elites" of businesses that would not pay taxes to support government services. "We all have a responsibility to support government services," he said.
State Rep. Richard Carlson, R-St. Marys, disagreed, saying the business tax cuts would result in more investment and jobs.