Topeka All six members of the Kansas congressional delegation are backing a federal tax reform package that Republican leaders and the Trump administration outlined this past week, despite the fact that many elements of the plan are similar to the one that Gov. Sam Brownback championed at the state level in 2012 and that a Republican-dominated Legislature repealed earlier this year.
The plan, as outlined on House Speaker Paul Ryan's (R-Wis.) website, calls for reducing the number of tax brackets to three instead of seven; lowering individual tax rates overall; reducing, but not eliminating, taxes on nonwage business income for business owners and farmers; reducing corporate income tax rates; and eliminating most itemized deductions.
Republican 2nd District Rep. Lynn Jenkins of Topeka, however, rejected the idea that the plan was similar to what Kansas tried.
"While some may try to compare this tax reform framework to what was tried in Kansas, the truth is these two reforms could not be more different," Jenkins said in a statement posted on her Facebook page. "Under our framework, everyone pays a lower rate. In terms of pass-through businesses, Congress will lower the rate to 25 (percent), not 0 (percent)."
But former state Rep. Paul Davis of Lawrence, a Democrat hoping to take the 2nd District seat as Jenkins steps down next year, drew a direct comparison between the congressional plan and Brownback's tax policies.
"Middle class Kansans need a tax break and a less complicated tax system. We can provide real reform to real people without increasing our deficit," Davis said in an email statement. "But we know that Washington special interests want something different. The last thing we need is a Brownback-style tax package that gives massive tax cuts to the wealthiest Americans and multi-national corporations at the expense of everyone else."
An analysis released Friday by the nonpartisan Tax Policy Center said the plan would reduce federal revenues by $2.4 trillion over 10 years. It also said the wealthiest individuals in the U.S. would receive the biggest tax cuts, while those near the bottom end of the pay scale — the 80th to 95th percentile — would, on average, see a tax increase.
The framework being floated in Congress contains many other elements as well, including provisions meant to discourage businesses from moving jobs, capital and tax revenue overseas.
Supporters of the plan also say it would make the tax system much simpler, enabling most individuals to fill out their returns on a form the size of a post card.
“There is widespread, bipartisan agreement on the need for tax reform,” U.S. Sen. Pat Roberts said in a statement posted on his website. “We ought to put aside partisan obstructionism, and take action on something in which a majority of Americans agree: Our tax code is burdensome, confusing and outdated."
By Thursday of last week, every member of the Kansas delegation, all Republicans, had issued a statement or posted comments on social media expressing their support for the framework. And some, such as 1st District Rep. Roger Marshall of Great Bend, used similar arguments about how tax cuts would stimulate the economy that Brownback and his allies used to support their plan in 2012.
"Economic growth from reforming our antiquated tax system will bring higher wages, and better jobs for working families in Kansas," Marshall said in a statement posted on his website. It’s time to fix America’s complex and outdated tax code so that Kansans families have more money in their pocket to save for retirement or plan for college."
Brownback himself often described his tax policy as a "real live experiment" to test the conservative theory that lower taxes, particularly on businesses, would spur economic growth. He also predicted the tax cuts would work "like a shot of adrenaline" into the heart of the Kansas economy.
The evidence from that experiment, however, was sketchy.
From January 2012, just before the tax reforms were enacted, through May 2017, just before they were repealed, labor market figures show Kansas employment grew only 6 percent on a seasonally adjusted basis. That compared with 9.6 percent growth nationwide over that same period.
Private-sector employment growth in Kansas also lagged the nation over that period: 7.5 percent for the state, compared with 11.2 percent nationally.
Meanwhile, overall economic growth in Kansas during that period also lagged behind the national trend, which was marked by the recovery following the Great Recession,
According to the U.S. Bureau of Economic Analysis, the private-sector economy in Kansas, measured in constant U.S. dollars, grew only 1.8 percent from the first quarter of 2012 to the first quarter of 2017. The national private-sector economy grew 11 percent over that same period.
Also during that period, the state of Kansas suffered severe revenue shortfalls that led to steep cuts in funding for things like Medicaid, higher education and highway projects, and a virtual freezing for two years in K-12 education spending.
Some members of the Kansas delegation, however, said they believe it's simply time for an overhaul.
"#TaxReform is long overdue," Sen. Jerry Moran posted on Twitter. "I look forward to discussing ways to fix our broken tax code w/ my colleagues and Kansans over the coming weeks."
"The last time our tax code was reformed was in 1986," Jenkins said in her statement. "The economy has changed drastically since then and our severely inefficient, bloated and complicated tax code is harming American families. I have been working for several years now to reform our broken tax code, to make it simpler and fairer."
Kansas Democrats running for Congress in the 2018 elections, however, have been predictably critical of the plan.
Jay Sidie, who is running to unseat Rep. Kevin Yoder in the 3rd District, posted on Twitter that it was mainly a tax cut for the rich.
"Big tax cut for $418k and up? Hey GOP, don't trickle down on our heads and tell us it's raining," Sidie wrote. "This economic plan fails us every time!"