Analysis group believes new tax plan could ruin Kansas
Topeka ? A nonprofit, nonpartisan organization that analyzes tax policy warned Wednesday that the tax plan recently approved by the Kansas Legislature could put the state “on a path to ruin.”
“Kansas legislators passed a plan this past weekend to drain the state’s reserves, cut taxes for the rich, raise taxes for many lower-income families and slash education in the process,” wrote Nicholas Johnson, vice president for state fiscal policy at the Washington-based Center on Budget and Policy Priorities.
“The state is on a path to ruin unless it changes course,” Johnson said.
The Center on Budget and Policy Priorities describes itself as a policy organization that works on federal and state fiscal policies and programs that affect low- and moderate-income families. It is sometimes described as left-leaning.
The bill that Gov. Sam Brownback has said he will sign into law will increase the state sales tax and reduce itemized and standard income tax deductions, while phasing down income tax rates, with the ultimate aim of totally eliminating state income taxes.
The proposal follows last year’s cuts in income tax rates and the elimination of income taxes on profits earned by nearly 200,000 business owners. Tax analysts on the right and left have criticized those tax cuts.
But Brownback says the key to economic growth is elimination of the state income tax.
“When you put the entire package together, this is an absolute tax cut of a substantial nature and puts Kansas on the radar screen for a lot of people that are looking for places that are pro-growth,” Brownback said.
Senate President Susan Wagle, R-Wichita, said, “It is exciting that we are lowering income taxes. Clearly that is the one tax you can cut to grow jobs. That is not a contested statistic or outcome,” she said.
But Johnson said the tax changes shift the burden toward low- and middle-income Kansans and shortchange the budget, which will limit spending on education and social services.
“And for what?,” Johnson said. “Despite promises of a boost to the state economy, real-life experience in the states and extensive academic research show that income tax cuts don’t generate meaningful economic growth.”