Archive for Thursday, May 23, 2013

Senate Republicans approve sales tax increase, cuts in income tax rates, lower food sales tax

May 23, 2013


— The Kansas Senate, with only Republican support, on Thursday approved a tax plan that will increase taxes by $879 million over the next 5 years.

The measure would make permanent the 6.3 percent state sales tax, but lower the sales tax on groceries to 4.95 percent.

Over the next 5 years, it would also phase out itemized deductions, such as mortgage interest and property tax, and decrease the standard deduction. But it would also lower state income tax rates from the top rate of 4.9 percent to 3.5 percent, and the bottom rate from 3 percent to 2.5 percent.

"We see this as an overall tax cut," said Sen. Caryn Tyson. R-Parker.

But Sen. Tom Holland, D-Baldwin City, disagreed, saying, "This, make no mistake, is a tax increase."

The combination of the various tax changes will produce $879 million more in taxes over 5 years. Holland said the tax cuts are skewed to the wealthy, with low-income Kansans seeing an increase in their tax burden.

But Tyson said the lower food sales tax proposal "does get the money into the hands that need it."

Democrats joined Republicans in approving the lower food sales tax portion of the bill in a unanimous vote.

Republican Sen. Jeff Melcher, of Leawood, spoke against the lower sales tax rate on food, saying it would encourage more food purchases and obesity. But then he voted for it.

Kansas is one of only seven states that charge the full sales tax on groceries.

But Democrats, and some Republicans, parted company with Senate GOP leaders on the rest of the bill, including portions that extend the higher sales tax, reduce the state income tax, phase out itemized deductions and cut the standard deduction.

Democratic amendments to remove the entire sales tax from groceries and to keep itemized deductions used by hundreds of thousands of tax filers on mortgage interest and property taxes were defeated.

The total tax package was approved 24-15 with only Republicans in support, and now goes to the House on Friday for consideration as the 2013 legislative session hit overtime.

The Kansas Constitution specifies a 90-day session, but it allows legislators to meet longer. Thursday was the 90th day.

Republican leaders had vowed that this year's session would only go 80 days, but they have been at an impasse over taxes and the budget.

Under current law, the 6.3 percent state sales tax is set to decrease to 5.7 percent on July 1. It was approved in 2010 as a temporary measure to avoid deep budget cuts during the Great Recession.

But Gov. Sam Brownback wants to keep the rate at 6.3 percent to shore up the budget — depleted from income tax cuts Brownback signed into law last year — and buy down future income tax cuts.

Conservative Republicans, such as Brownback, are championing the phase-out of state income tax as a way to grow the economy, even if that means increasing sales taxes.

After the Senate vote on Thursday, Brownback issued a statement of support. "The tax proposal passed by the Kansas Senate Thursday night lowers the tax burden on all Kansans. I appreciate the work by the Kansas Legislature this session and will sign this pro-growth tax bill should lawmakers vote to send it to me,” he said.

But Democrats say the higher sales tax and elimination of itemized deductions hurts low- and middle-income Kansans.

"This is really bad tax policy," said Senate Minority Leader Anthony Hensley, D-Topeka. "I can't participate in tax policy that is just going to take this state down the road to ruin."

But Senate President Susan Wagle, R-Wichita, said she agreed with Brownback's philosophy that reducing income taxes would spur economic growth. She said the lower sales tax on food was a "sweetener" to lure House members to vote for the package.

Meanwhile, House Republicans have proposed setting the sales tax at 6 percent. That proposal was shot down as an amendment in the Senate, failing on a voice vote.

Wagle later issued a release saying the Senate was willing to work through the Memorial Day weekend to wrap up the session.


WilburM 3 years ago

The reduced sales tax on food, while a decent idea in itself (it should be zero!), represents lipstick on the pig of tax increases on the poor, tax breaks for the wealthy. God help us if this is what Brownback and the GOP Senate consider "negotiation." And remember all those (191K) Chapter S and LLCs not paying ANY income tax.

Bad policy, bad process.

George_Braziller 3 years ago

Bingo. This is a recipe for disaster. Hold onto your panties. The rich will get richer, the poor will get pooer, funding for the safety net programs will drop, but local property taxes will shoot through the roof.

"This is really bad tax policy," said Senate Minority Leader Anthony Hensley, D-Topeka. "I cant participate in tax policy that is just going to take this state down the road to ruin," he said.

question4u 3 years ago

You left out the part about how unjust it is for business owners not to "pony up the same percentage of every dollar" they make. No doubt that was an oversight. After all, just because you make $2,000,000 a year "doesn't mean that you should not have to pay any tax."

You're right. Brownback and the Legislature have clearly come up with a tax plan that cannot be called fair by any stretch of the imagination.

JayhawkFan1985 3 years ago

Not able to think, just because you believe in Santa Claus doesn't mean he's real...the rich pay a lower percentage of their income in taxes because the game is rigged. People here are upset because they're getting even more now.

jafs 3 years ago

If true, that's as it should be, since they have an enormous share of the income, right?

Brock Masters 3 years ago

Jealous? Why should the rich have to pay a greater share of their income than anyone else? Let the rich pay the same percent as others removing any deductions that only they can utilize. They will pay more but at the same rate. That is equality.

jafs 3 years ago

Not at all - I'm very comfortable with my level of material prosperity.

There are many different ways to look at tax policy. My point was that if they're paying a lot in taxes and they have a lot of money, that's a perfectly fine situation from one point of view.

In my opinion, it's impossible to create a "fair" taxation system - all proposals have upsides and downsides. For example, your version of a flat percentage is widely understood to be more of a hardship for those at the lower end of the economic spectrum.

That's why some argue for "progressive" taxation.

JayhawkFan1985 2 years, 11 months ago

Everyone should pay the same rate on the same increment of income. The first increment should be taxed at the lowest rate. The next increment at a slightly higher rate. Etc. it is called a GRADUATED income tax. It is fair because everyone needs to be able to afford food, clothing, shelter and transportation...the basic necessities. Income used to purchase luxuries are nice and possibly even deserved. However, the founding fathers didn't want a permanent aristocratic class in this country as they witnessed in Europe. A graduated income tax rate is the only FAIR tax there is.

JayhawkFan1985 2 years, 11 months ago

We've been through this many times. You watch way too much faux news.

tomatogrower 3 years ago

notwhatyouthink, The rich benefit even more from our society. If they are in business, they use the roads more than the poor do, transporting their goods. They fly more, so they use the security more. They have more stuff to protect, so they use the police more. They have benefitted from our society, so why shouldn't they pay more. Perhaps if they would "trickle" down some of their wealth in jobs and decent pay for their workers, there wouldn't need to be as many social programs. But I'm sure you love places like WalMart where our tax dollars subsidize their poorly paid work force, so they can earn more money than they can ever spend.

Brock Masters 3 years ago

And they already pay more road tax and more airport security tax than someone who uses the road or airports less so your point is not valid.

William Weissbeck 3 years ago

What, being poor isn't enough of a burden? Do you seriously believe that the poor have no stake in the community because they pay no taxes? We essentially have a flat tax now - both state and federal. Only two state brackets and 4 federal. And if you are so in favor of a flat tax, then why not raise the cap on the FICA tax to include all income instead of the first $109,000? Isn't that fair?

parrothead8 3 years ago

People who make 20,000/year DO pay taxes. Payroll taxes, sales taxes, gas taxes, property the time it's said and done, people at that income level barely have enough to pay the bills and eat. Is it only a "fair share" once they're starving?

Andreas Moeller 3 years ago

"...lowers the tax burden on all Kansans" says Brownback. But the reality is: "...a tax plan that will increase taxes by $879 million over the next 5 years". That just says it all, no matter how politicians want to turn it. And I am not even against increasing taxes, if its for a reasonable cause. Just stop the blatant lying. And then some representatives are just off the wall, "lower food tax will increase obesity", and should just retire.

lhenry69 3 years ago

Evidently Melcher and Wagle haven't ever went hungary....

Thinking_Out_Loud 3 years ago

I've never gone to Hungary, either. I have a friend who lived in Budapest for a few years, though.

weeslicket 3 years ago

my friends Chad and Jordan taught me that when i am feeling Hungary, a high protein, low fat food like Turkey is the best choice (not a lot of Greece left over). once, i put on a nice rub with a lot of Chile, and ate it off of my good China. Oman it was good.

Charlie Mehl 3 years ago

I have not lived in a 3rd world country but I have driven through them. They're called Indian reservations. I'm pretty sure these Americans don't know how lucky they are!

Brock Masters 3 years ago

And who is to blame for the poor conditions? No one is forced to stay on the reservation. They get benefits from the government and often job preference over non-Indians plus their education is paid for so who is to blame ?

avarom 2 years, 12 months ago

Well that's calling the kettle black....have you ever seen the grays in the legislature....there is not a slim one in the bunch. Maybe, they should demand special dispensation to Increase food tax, just in the State House Food Courts, to sway the State House Munchers from eating, to better thinking........and cut down on the breakfast and lunch speeches...Kansas citizens can't afford you....Ugh!

verity 3 years ago

We know what their word is worth now, don't we---regarding the sales tax.

So we're to believe that the income taxes of the rest of us will eventually disappear even as they are raising them. Right.

And apparently everyone is afraid to run against the well-funded Koch Machine, so we are stuck with this forever. Going to be a long winter as we regress to the dark ages.

Thinking_Out_Loud 3 years ago

I don't think I'd ever heard of low sales tax before as one of the causes of obesity. I wonder if Sen. Melcher has published these findings?

arch007bak 3 years ago

Has one shred of evidence ever been shown that reducing income tax rates at the top produces economic and job growth? It didn't work in the 80's under Reagan, didn't work under GW Bush and yet somehow it will work now...

Wasn't it Einstein that said something about trying the same thing over and over and expecting different results?

Ron Holzwarth 3 years ago

"Insanity: doing the same thing over and over again and expecting different results."
- Albert Einstein

Thinking_Out_Loud 3 years ago

Misattributed. Einstein almost certainly didn't say this.

It may very well fit in this scenario, though....

arch007bak 3 years ago

All part of the reason I stated it the way I did.

I know a four year old who eventually gives up after he realizes that try, try again doesn't work.

Ron Holzwarth 3 years ago

"You shouldn't believe everything you read on the internet."
- Abraham Lincoln

lhenry69 3 years ago

Looking for another home in another State....that isn't insane........tyson and brownback need to drive thru Parker Ks and take a look at what prosparity is....put more burden on them browny.....

jafs 3 years ago

I am amazed that anybody can say "This is a tax decrease" if it results in more tax revenue.

Don't they understand that's impossible? This isn't using some sort of weird projections about how the taxes will change the economy, and predicting more taxable activity, right? It's just calculating that with the new plan, the government will collect more in taxes from the same activity.

Obviously it's a tax increase then, if it results in more revenue.

tomatogrower 3 years ago

Most of us see through the lies, but there are those who just see that R and go into a trance, and say War is Peace.

Brock Masters 3 years ago

Not true jafs. Now I agree that this is not a tax decrease but reducing taxes can increase revenue. For example reducing luxury taxes have spurred sale thus increasing revenue.

jafs 3 years ago

As I said, this isn't that sort of calculation.

And, if you calculate it, it takes a very large multiplier in sales to make up for tax rate decreases, since the amount collected is a small percentage of the total sale price.

JohnBrown 3 years ago

"We see this as an overall tax cut," said Sen. Caryn Tyson. R-Parker.

Amazing how Tea Party RINOs lie whenever it suits them. Anytime you mess with the tax code and it results in more taxes it's a tax increase. Duh.

Funny how these RINOs recognize that increasing taxes can reduce deficits. We need to get some of these people to Washington and have a talk with Boehner.


tomatogrower 3 years ago

"Republican Sen. Jeff Melcher, of Leawood, spoke against the lower sales tax rate on food, saying it would encourage more food purchases and obesity. But then he voted for it."

Really? Really? Maybe it would allow them to buy more fruits and veggies, instead of more stomach filling pasta and ramen noodles. Maybe it will allow them that little extra to pay the gas bill instead of asking for assistance. Maybe it would save them enough to go to the laundrymat instead of washing their clothes in the sink. And of course he voted for it. He better toe his parity's line, or they will make sure he doesn't get the cushy KPERS deal that allows part time legislators to get a higher pension than teachers and firefighters. You know the Republican mantra. Those who do the real work should get less, than those who take "risks", whatever that means. I mean they don't need any of their workers, they built their businesses all by themselves.

Charles L Bloss Jr 3 years ago

I would much rather see no property taxes, and no tax on groceries. Sales tax on other things is the fairest tax of all. Everyone pays their fair share. People who work hard to acquire property (homes) should not be penalized for it, nor should they be penalized for saving up and buying a new car.

chootspa 3 years ago

Add in a progressive income tax without an exception for pass-through income, and I'd agree.

tomatogrower 3 years ago

Think about it. You will be paying more taxes to Kansas if you are a homeowner, which will probably make more people decide owning a home isn't worth it. Then they will go rent from a business who will be able to deduct the property tax as business expense, and, oh wait, they don't have to pay any taxes anyway. They're a business. Who benefits?

Thomas Bryce Jr. 3 years ago

"The more people that pay taxes and see government benefits come at a cost, the better off everyone is." True ,but there is now a group that does not pay taxes that they used to pay. That Means LESS Revenue. This only benefits A small percentage of the population at the expense of the others. Great Plan if you are in the top Percentage Point. Does not help(actually hurts) everyone else.

Thomas Bryce Jr. 3 years ago

"The more people that pay taxes and see government benefits come at a cost, the better off everyone is." True ,but there is now a group that does not pay taxes that they used to pay. That Means LESS Revenue. This only benefits A small percentage of the population at the expense of the others. Great Plan if you are in the top Percentage Point. Does not help(actually hurts) everyone else.

Thomas Bryce Jr. 3 years ago

Sorry about the Double print. Flagged this one for removal. Me and my Big fingers!

tomatogrower 3 years ago

The states who relied on sales tax when the economy went south were the hardest hit. You want to put us in that situation?

George_Braziller 3 years ago

So now I get to pay taxes on my taxes. I make money to pay my property tax bill but now can't deduct it so I get to pay income tax on the amount as well.

appleaday 3 years ago

Well, hang on -- the House just voted it down 109-5, meaning they all have to go back on Tuesday. This whole thing is disgusting.

chootspa 3 years ago

And Tuesday will cost the taxpayers another $45,000. Let's see how much more those fiscal conservatives will cost us to fight with each other.

verity 3 years ago

Might one say they're milking the system? You know, like all those people just having more babies so they can grab more taxpayer money?

chootspa 3 years ago

Maybe we could privatize the legislature to make it more efficient. Just hire a bunch of private companies to write all our laws and... no, wait. We already do that.

verity 3 years ago

Something that is never mentioned is that local governments also charge sales tax in addition to the state sales tax. I just bought some lumber today in a very small Kansas town a short distance from the town I live in and paid 8.3% sales tax. Most receipts don't tell you the percentage you're actually paying, but I see now that's what I'm paying on everything, so probably the extra 2% is a county tax.

George_Braziller 3 years ago

Sales tax is 8.85% in Lawrence. Unless you shop in one of the newly developed areas on the far west side where it's higher. The city has allowed the developer to collect a higher rate to help pay for their infrastructure expenses.

Linda Endicott 3 years ago

I'm not sure I understand exactly how they're going to do this...if you go to a place like Wal-Mart and buy both food and non-food, how do they calculate what sales tax you owe? Will we have to start putting stuff on the checkout and separate it by what it is?

George_Braziller 3 years ago

Almost no one uses a manual cash register any more. It's all scanned now and the price, item description, and sales tax is already calculated. The info is in the bar code. Stores know exactly how many avocados and quarts of oil were sold, what moved through a particular check-out line and the information goes to the inventory and accounting sides.

Robert Greenwood 3 years ago

"Kansas is one of only seven states that charge the full sales tax on groceries."

verity 3 years ago

We can bitch, moan and complain, not going to do a bit of good as long as nobody runs against these fools (and that's being nice).

Paul Davis for governor, Marci Francisco for Lt Governor

Please email them or post on their Facebook pages.

Larry Sturm 3 years ago

Goodby to the housing maarket in Kansas.Getting rid of the morgage interest deduction will kill the realestate market.

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