TOPEKA — A plan by Republican legislative leaders to flatten income tax rates would save billionaire political donor Charles Koch an estimated $875,000, while most of the state’s workers would save between $37 and $84 annually, according to an analysis by the Institute on Taxation and Economic Policy.
But GOP leaders touted their tax package Tuesday as an attempt to “primarily” benefit Kansans living paycheck to paycheck.
Senate President Ty Masterson and House Speaker Dan Hawkins packaged their favored “flat tax” with other tax cuts that have bipartisan support, gutted House Bill 2284, which previously dealt with firefighter health insurance, then fast-tracked the bill through votes in both the Senate and House last week. Democratic Gov. Laura Kelly is expected to veto the bill, which didn’t pass either chamber with enough support to override a veto.
The total package would reduce state revenues by $1.6 billion by July 2027. The flat tax component, which establishes an income tax rate of 5.25% for all income brackets, would lower taxes by more than $300 million per year when fully implemented.
Kansas currently uses a graduated income tax rate: 3.1% for income under $15,000, 5.25% for income between $15,000 and $30,000 and 5.7% for income above $30,000. The income amounts are doubled for couples filing jointly.
The proposed flat tax would exempt the first $6,150 in income for individuals, or $12,300 for married couples, ensuring that every bracket benefits.
ITEP, a nonpartisan research organization that favors a progressive tax system, calculated that 44.5% of the income tax savings would go to the top 5% of wage earners. The bottom 80% of wage earners would get an average annual tax break of $89 under the flat tax, while the top 20% get an average of $828.
HB 2284 also includes provisions that were part of the governor’s $1 billion tax cut plan, which has bipartisan backing. They include an exemption on Social Security income, property tax relief, a tax cut for banks, an increase in standard deductions for income taxes, and an accelerated timeline for phasing out the sales tax on food.
Masterson, of Andover, and Hawkins, of Wichita, gathered with other Republican lawmakers Tuesday for a ceremony at the Statehouse to finalize paperwork for HB 2284.
GOP leaders released statements falsely claiming low-income Kansans would see the most benefit.
“This plan provides nearly everything the governor asked for and is purposely designed to primarily help those who are on the lower rungs of the economic ladder,” Hawkins said. “… By simplifying the tax code, it will catapult Kansas into a category of states that have tax structures proven to spur economic growth. If the governor is serious about providing tax relief, she’ll sign this bill.”
Masterson, invoking the governor’s campaign slogan, said he was asking Kelly “to meet us in the middle.” He said the GOP tax plan “is geared towards helping retirees, homeowners, and those living paycheck to paycheck.”
According to the ITEP analysis, lowering the top income tax rate from 5.7% to 5.25% “would be especially lucrative for the state’s wealthiest individual, billionaire Charles Koch.” His tax savings would be in the neighborhood of $875,000 per year, while the median household income in Kansas is below $70,000.
House Minority Leader Vic Miller, a Topeka Democrat, said Republican leaders were “playing people for fools.”
“They think they can fool all the people all the time, and you can’t,” Miller said. “Their plan continues to ignore the working class. Yes, they throw peanuts to the poor. But the one group I’m most concerned about that needs relief that they continue to ignore is the working class.”
