Report: Kansas has ninth most regressive tax code

Lower-income people in Kansas are taxed at more than twice the rate as upper-income people, according to a new report released Wednesday.

The fifth edition of the “Who Pays?” study from two think tanks, the Institute on Taxation and Economic Policy (ITEP) and the Kansas Center for Economic Growth, says the poorest 20 percent of people in Kansas will pay, on average, 11.1 percent of their income in state and local taxes in 2015, compared with a 3.6-percent tax rate for the wealthiest 1 percent.

That puts Kansas in ninth place on the groups’ list of the “Terrible 10” most regressive states in the country.

“The bottom line is that every state fails the basic test of tax fairness,” the report stated. “The District of Columbia is the only tax system that requires its best-off citizens to pay as much of their incomes in state and local taxes as the very poorest taxpayers, but middle-income taxpayers in DC pay far more than the top one percent. In other words, every single state and local tax system is regressive and even the states that do better than others have much room for improvement.”

The report noted that states with the most regressive tax codes tend to rely heavily on sales taxes, which economists say hit lower-income people harder because they spend a greater share of their income on taxable retail purchases.

It also noted that Kansas recently overhauled its tax code by lowering income tax rates and raising the sales tax rate.

On a side note, former Kansas budget director Duane Goossen, who recently retired from the Kansas Health Institute, will soon join the Kansas Center for Economic Growth as a senior fellow. Goossen served as budget director for 12 years under Govs. Bill Graves, Kathleen Sebelius and Mark Parkinson.