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GOP tax plans would increase taxes on low-wage Kansans, decrease taxes for high-income Kansans, report says

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Topeka — Taxes will increase for low-wage Kansans and decrease for those with higher incomes under plans being considered by Republican state legislators, according to a Washington, D.C.-based think tank.

The Institute on Taxation and Economic Policy looked at the various proposals before the Legislature that essentially increase the state sales tax while ratcheting down the income tax and reducing deductions.

ITEP report on proposed tax changes before the Kansas Legislature.

ITEP report on proposed tax changes before the Kansas Legislature. by Scott Rothschild

Currently, the state sales tax of 6.3 percent is scheduled to decrease to 5.7 percent on July 1. But Gov. Sam Brownback wants to keep the rate at 6.3 percent, saying that will stabilize the state budget and help buy down income tax rates.

A Senate GOP plan to keep the rate at 6.25 percent, while lowering income tax rates, would result in a tax increase for 60 percent of Kansans, making $60,000 per year or less, the ITEP analysis shows. Of that group, the largest percentage increase would be for those making $20,000 per year or less.

But those making more than $60,000 per year would realize a tax cut under the proposals. ITEP is a nonprofit, nonpartisan group. Its stated mission is to provide information on tax policies, tax fairness, government budgets and sound economic policy.

Comments

Phil Minkin 1 year, 7 months ago

Welcome to Kansas, where it is Robin Hood in reverse.

Terry Snell Sr. 1 year, 7 months ago

Low income Don't pay taxes, they get state aid, reduce housing, cash assistance ,Food stamps then at the end of the year they get back thousands in income taxes so yes I'd like a tax break thanks sam.

Lisa Medsker 1 year, 7 months ago

"Low income" would suggest there is an income to actually BE "low". As in "work", of some kind. If there is any kind of income, people DO NOT qualify for cash assistance, or reduced housing. A TOTAL income of 975 per month, with two children under 14, will qualify you for 82$ per month in food assistance. If there is no income, how are they getting "thousands" back on their income taxes?

Tomato 1 year, 7 months ago

Well, they're getting it back in the form of refundable credits, like the child tax credit, American Opportunity Credit , Earned Income Credit. These federal tax credits easily add up to thousands.

Kansas has a refundable food tax credit (it's pretty minimal) and it's own EITC. But the bulk of the money that low-income tax payers get comes from the federal government.

Of course, you have to have earned income to get the EITC - but you can still get various other refundable tax credits if you have no income. Most of these credits are based on how many kids you have.

A hypothetical single person with no children, no job, and not currently enrolled in university would get something like a $94 refund from the KS government and not much else.

But your hypothetical family with two kids would get $2000 from the child tax credit and closer to $300 from KS. That would increase if you can slip some higher education in there or nominal earned income.

Lisa Medsker 1 year, 7 months ago

Full-time student, currently, with no income other than the savings I sweated for so that I could do this. I have two children. I do not qualify for any kind of tax refund, and I paid Kansas $83 last year. I do not qualify for any "welfare benefits", either. (Students, even if they already have a Bachelor's and thereby don't get Pell Grants, I am told, have an unlimited income of student loans.) What in the world am I doing wrong???

angie497 1 year, 7 months ago

Which is certainly a good reason for increasing the tax burden on a childless disabled person, right?

For crying out loud, if you think that poor people with kids are just rolling in the dough and shouldn't get income tax breaks, then for god's sake, work to change THOSE laws. But for the life of me, I don't understand how giving people who have almost nothing in the first place a tax credit justifies giving a far bigger tax break to the people that already have the most.

tomatogrower 1 year, 7 months ago

They aren't talking about the hit that middle class people will take when they can't deduct their mortgage interest, so it isn't just the poor who will be paying more. The poor and the rich receive the biggest benefit from from taxpayers, the poor to keep them from starving, the rich who get the most use out of our infrastructure.
Itdman, are you someone who owns their own business so you won't pay any more income tax? Yet, your business probably requires good roads, and other things my taxes pay for. Is your home paid for? Even if it's not, and you are a business owner who doesn't have to pay taxes anyway, the mortgage interest deduction doesn't affect you anyway. So, are you going to give your workers a raise? Are you going to hire more workers? Do your workers earn a living wage, and do you provide benefits? If the middle class no longer have that deduction and have to pay more taxes to Kansas, how are they going to buy more product and/or service from you? Why not think a little past your own temporary boost?

msezdsit 1 year, 7 months ago

The plan is working just like ALEC expected.

yourworstnightmare 1 year, 7 months ago

It's only fair that lower income people pay more taxes. The wealthy have been paying the majority of taxes for too long. I mean, low income people just take take take, and the wealthy do not benefit at all. If this continues, everyone will be low income and dependent upon the government.

This comedic interlude brought to you by YWN.

chootspa 1 year, 7 months ago

I know I envy people who have to stand in lines for hours and hours and wait for buses and fill out bunches of forms and jump through hoops and possibly pee in a cup, because those people don't have to work. Whoops, gotta go. I'm getting ready for another cruise, and I've got to make sure the dogs are at the sitters and the landscaper has the latest plans.

Anyway, those poor people just have it so easy. They should have less money in their pockets, because they might spend it on something frivolous.

pmr7736 1 year, 7 months ago

Amen to that, sir! It's obvious that the blue-collar and service workers, the part-time and the underemployed of Kansas, live like royalty. No more gravy train, no more bankrolling the lives of the lazy, the unmotivated, and the immoral! This will be the incentive they need to become productive and virtuous! In the meantime, let them taste a bit of the suffering they have inflicted on the makers and the moral!

James Nelson 1 year, 7 months ago

I can only pity the poor average republican in Kansas who will vote conservative morons into office who will then come right back and slit their throats. Will Kansas republicans EVER learn they are not part of the 1%, 99% of them anyway? They are proving to be the most masochistic chunk of humanity ever produced on earth.

pmr7736 1 year, 7 months ago

You have a good point, except that those folks don't deserve pity for being destructive. It's the rest of us, who have to endure the leaders their ignorance put into power, who are truly suffering.

motstraumen 1 year, 6 months ago

I agree, topekaj, our state is run by folk that use scare tactics to convince the majority that the left are monsters. This logic wins over and over. I would not be surprised that 95 % of Kansas believe that Moderate Republicans, Moderate Democrats and the more left leaning are covert aliens sent here to suck the life breath from them.

Pepe 1 year, 7 months ago

The article seems to be somewhat misleading. The article says that only those making $60k or more would receive a tax cut. However, according to the attached chart, 3 of the 4 scenarios would result in a tax cut for anyone making $37k or more. In other words, under 3 of the 4 scenarios, 60% of tax-payers would see a decrease. The headline says that the tax decrease would only be received by "high-income Kansans" which seems misleading when anyone making $37k or more (which is certainly not high-income) will see a decrease in taxes. A fairer headline might read ". . . decrease taxes for lower middle class, middle class, and higher income Kansans"

chootspa 1 year, 7 months ago

Only those earning more than $60,000 per year would see a net decrease under all proposed plans.

Pepe 1 year, 7 months ago

Right, but under 3/4 of the proposed plans (and under both of the current plans offered on 5/22), anyone making $37k or more would see a decrease.

angie497 1 year, 7 months ago

You're mis-reading what was written. First, the headline does not say that only high-income Kansans would see a decrease; you're adding a qualifier that is not there. Second, the article does not say that only those making more than $60K would receive a tax cut. It says that under the Senate plan, only those making more than $60K would receive a cut, which is exactly what is shown on the chart.

And you're also misstating the number of taxpayers affected. It's not 60% of taxpayers that would see a decrease. It's taxpayers in the top 60% of income, which is a far smaller number of taxpayers. The Senate plan, which would decrease taxes for only the top 40% of incomes, gives a tax break to an even smaller number of people. While income and wealth are not identical, the numbers are close enough that it's worth keeping in mind that roughly 50% of all wealth is controlled by only the top 1% of households. The next 19% of households control roughly 35% more. That means that the top 20% of households controls almost 6 times as much wealth as the bottom 80%.

And regardless of where you draw the line to consider someone high-income, there's something that every single one of those plans have in common. Every one of them increases taxes on people in the bottom 20% of incomes.

question4u 1 year, 7 months ago

A lot of Kansans making under $60,000 a year helped put these right-wing extremists in office, so they must be happy to know that they will soon be paying higher sales tax and having their standard deductions slashed in order to make wealthy Kansans wealthier. They'll get an even bigger kick out of paying higher local property taxes to make up for state cuts to schools.

Yes, Kansans love taxes, so long as you don't waste them on highways, schools, prisons, public safety or health care. As long as you're paying higher taxes so that your boss doesn't have to pay any income tax, then everything is fine. That's how it works in the third world.

Catalano 1 year, 7 months ago

So blessed to be part of the lowest 20%, where my taxes will increase no matter what plan is approved. I kick myself every day for deciding to move back "home". And, hey, did anyone catch this from Old Home Town yesterday...yep, even back then they were saying "What we really need to do is create more jobs with adequate wages". So, Lawrence, what have you done in the last 25 years to rectify that?

From the Lawrence Daily Journal-World for May 22, 1988:

The Lawrence Journal-World this morning launched a series on "the plight of the local working poor." The first article referred to statistics provided by the Kansas University School of Social Welfare, saying that "the fastest growing group among the poor is the 'working poor,' not the 'welfare poor.'" The U.S. Department of Labor in 1988 was classifying those earning less than $5.10 an hour as "low earners," and nearly 80 percent of the jobs advertised at the Lawrence Job Service Center in the previous week were paying less than $4.50 an hour. "What we really need to do is create more jobs with adequate wages," said Ann Weick, dean of the KU School of Social Welfare. "What we are doing now is assuming the job will support people and it is the worker's fault if they don't succeed." An estimate based on 1980 U.S. Census figures placed the number of Douglas County families living below the poverty level at 2,000.

Bob Forer 1 year, 7 months ago

The primary force behind tax cuts for wealthy in Kansas is the Koch brothers, whose combined net worth tops 50 billion dollars. They have more money than they could ever dream of spending, yet they are intent on padding their unimaginable wealth at the expense of poor working folks who are struggling to feed their families.

Their unmitigated greed with nary an ounce of compassion nor empathy for the worst off amongst us is abominable. Hell, it's pathological. Simply put, the Koch boys are crudely warped and demented human beings.

Mike1949 1 year, 7 months ago

Yet, how many Kansans voted these conservatives into office? We must have a lot of people making more than $60,000 a year that they would stick it to the poor!

Can't believe the number of heartless people in Kansas! Considering 3 out of 5 are racist or show racist's tendencies, I guess I shouldn't be too surprised!

George Lippencott 1 year, 7 months ago

Now for some reason our "goivernator" believes that by cutting taxes for the wealthiest Kansans that will increase job prospects for the rest of us. I do not understand that reasoning.

Are we arguing that by allowing an increasingly free ride for all high income Kansans we will attract business? Just how many high income Kansans own a business where the proceeds are taxed as personal income. Could those in that set not incorporate and avoid personal income taxes on the businesses’ income? Would not the businesses most likely to hire any significant number of Kansans not be subject to personal income taxes?

Do the wealthy people running these companies actually pay personal income taxes or is much of their income tax preferenced? Is asking the wealthiest Kansans to pay 2 or 3% more on the salaried portion of their income a real driver on any real decision process?

Could we just be a demonstration project for the Republican notion of "starving the beast"? If so what is the beast in Kansas. We are at best in the middle of the pack on services provided and taxes taken. It is interesting that we seem to be avoiding as much as possible any real cuts in services or are offering a way for those services to be funded locally. (tax transfer as opposed to tax cuts)

I hate being a test case for implementing theory with no tie to reality. In 2016 will we see Mr. Brownback move back to the national stage touting credits for reducing income taxes at the state level in Kansas? Will he be leaving behind a meaner state government while ignoring tax increases (sales tax) or local tax increases to minimize the services cut?

I suspect the fix is in to show with statistics job increases as we are coming off a recession and there are a number of federal initiatives that will bring many good jobs to the state (not caring one iota about state income taxes.

The average Kansan will mostly see a negligible tax reduction (.1%) while experiencing service cuts and local tax increases. The vast majority will not benefit from any increase in jobs brought about by Mr. Brownback’s initiative. I seriously doubt that the average Republican voter in the rest of the state opted for this.

Look at the positive side. We will all have an opportunity to put it all back together at the next state election cycle when the surviving Republicans (after Mr. Brownback’s team leaves) will have the unenviable opportunity to explain the mess they created.

chootspa 1 year, 7 months ago

I've got some pass-through income that will no longer be taxed. It will do zero towards making me hire someone. I suspect it's the same for other pass-through filers. You hire people because you have more work than you do time. You don't hire people because you've got extra cash lying around and want an excuse to spend it.

George Lippencott 1 year, 7 months ago

Don't tax pass through income - for many businesses we do not. . To do that we do not need to reduce personal income taxes.

Thomas Bryce 1 year, 7 months ago

Who do we believe? The Institute for Taxation and Economic Policy or an unnamed analysis from an article in the Journal World Yesterday that claims the Exact Opposite? All I Know Is Both Cannot be Right. Would have been nice if they had sourced the analysis from the article Yesterday.

Thomas Bryce 1 year, 7 months ago

OOPS! Found it. Kansas Dept. Of Legislative Research did the Analysis at the Request of the Legislature. Say No More.

tomatogrower 1 year, 7 months ago

You know if all the workers decided not to do the work anymore until the rich people decided to stop being greedy, they might suffer for a while, but then the uppity 1% would figure out that they didn't build it. Of course, they have workers convinced that someday they too will be filthy rich. They have convinced them that they should take whatever they can get, then get laid off, if the profit doesn't grow enough. Not if the profit is good, but the profit didn't grow enough. Then the companies down size or move to another country, just so the CEO's and investors can earn more money than anyone can spend in their lifetime.

George Lippencott 1 year, 7 months ago

workers of the world unite!!???? All problems will b e solved????

Larry Sturm 1 year, 7 months ago

Pandering the rich is what makes poverty. third world ccountrys have the rich and the poor. Why is that?

Grump 1 year, 6 months ago

I make more than $60,000. I don't want a tax cut. I want tax policies that encourage and help the poor and lower-middle income to obtain and keep meaningful jobs. I want a state budget that enables them to obtain meaningful eduction for their children so they and the state can advance.

I do not believe in John Galt.

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