Archive for Wednesday, May 9, 2012

State revenue department figures say tax plan helps all

May 9, 2012, 2:04 p.m. Updated May 9, 2012, 3:00 p.m.


— A plan that Kansas legislators are considering to cut income and sales taxes would benefit all classes of taxpayers, according to figures released Wednesday by Gov. Sam Brownback's administration only hours before a crucial vote in the Senate.

The state Department of Revenue's analysis conflicted with a national think tank's conclusion that the plan would shift part of the state's tax burden from its wealthiest residents to its poorest. That report bolstered misgivings among Democrats and even some of Brownback's fellow Republicans.

The Associated Press obtained the figures before the department released them to the Legislature's staff. The figures show that some of the state's poorest taxpayers who now receive income tax refunds would receive smaller refunds under the plan. However, the department projects that such a change would be offset by a reduction in the sales tax.

"The take-away is that everybody gets lower tax rates," Revenue Secretary Nick Jordan said during an interview. "We think this benefits everybody."

Senators expected their vote Wednesday afternoon to be close. If senators pass the plan, the House would vote on it, possibly as early as Wednesday evening. House approval would send the measure to Brownback, who already has endorsed it.

The plan would reduce individual income tax rates, and phase out income taxes for 191,000 partnerships, sole proprietorships and other businesses. It would drop the state's sales tax to 5.7 percent in July 2013 from its current 6.3 percent. The proposal also would make numerous other changes, eliminating or restricting some tax breaks, including several targeted to poor and working-class families.

The Washington-based Institute on Taxation and Economic Policy, which issued its critical report on the plan Tuesday, assessed only the income tax changes. Executive Director Matthew Gardner noted Wednesday that in 2010, when legislators boosted the sales tax to close a budget shortfall, they promised to drop it again next year. Therefore, the sales tax reduction in this year's plan isn't a true cut, he said.

"On the income tax side, they're basically showing what we show," Gardner said in an interview. "There is clearly nothing in the Department of Revenue analysis that contradicts what we're saying."

Brownback has pushed the GOP-controlled Legislature to reduce income taxes to stimulate economic growth, while skeptics worry the cuts will create future budget problems.

The plan, drafted by negotiators for the two chambers, is expected to provide about $60 million in tax relief for the fiscal year beginning July 1, with the total eventually rising to about $600 million annually.

The Washington institute said the plan would result on average in a small tax increase for Kansans earning less than $20,000 a year, while Kansans earning more than $400,000 would receive the biggest tax cut. The institute is a research group advocating progressive tax codes, and its board includes Robert Reich, a former U.S. labor secretary under Democratic President Bill Clinton.

The Department of Revenue's figures show that about 285,000 Kansans with adjusted gross incomes of $25,000 or less — and who collectively owe taxes instead of receiving a refund — would see their income taxes drop by about 10 percent for 2014. In contrast, the department said, taxpayers with incomes of more than $250,000 would see their income taxes decline a little less than 9 percent.

The department did a separate analysis for 279,000 taxpayers with incomes of $25,000 or less who, as a group, receive refunds. Their refunds would decline about 11 percent, but the average decline of $34 would be offset by an estimated $60 drop in their annual sales tax payments.


dabbindan 6 years, 1 month ago

why not keep taxes the same, build a surplus,THEN cut your damn taxes. it revenue doesn't enhance, pay the deficit from the saved surplus. then go back to the old tax structure. no one loses.

if you're right sam, everybody wins and the surplus can go to the arts.

notorious_agenda 6 years, 1 month ago

The government is not a buisness for profit. Surplus is our money, it belongs to us.

jafs 6 years, 1 month ago

So then "we" should decide what to do with it.

Did you see the results of a poll among likely R voters? About 3/4 said we should either use the surplus to fund education, social services, etc. or save it - only 1/4 of them thought we should just cut taxes and give it back.

Evan Ridenour 6 years, 1 month ago

The issue with this claim is that the sales tax is supposed to drop REGARDLESS. It shouldn't be tied to a "deal" on cutting income taxes. Lower class individuals are going to be paying more in income taxes so the wealthy can pay less.

It is a simple regressive tax scheme. At least be honest about it...

Michael LoBurgio 6 years, 1 month ago

Kansas House sends massive corporate tax break bill to Governor’s Desk

So in order to cut $3.7 Billion out of the budget before 2018 to give away in tax cuts 40% of the State General fund will be cut.

Public education will be gutted, costing teachers their jobs, forcing more schools to close and increasing class sizes for Kansas children.

State agencies will be slashed, costing state employees their jobs and asking those who remain to do more – and serve more Kansans – with dramatically less.

And absolutely nothing in this tax bill will address the tax that impacts more working families than any other: property tax. In fact this tax bill guarantees that property and sales taxes will go up across Kansas.

Mike1949 6 years, 1 month ago

It is called the bait and switch. Cut here, but pay more there. Usually it is a lot more! brownback isn't fooling anyone. The bottom third of Kansans are going to feel the pain the most. More kids going hungry, old people can't afford medical care and just dying off. It's the Republican Dream!

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