The momentum is growing among Kansas House and Senate Republicans to change the state’s tiered income tax system to a flat tax rate, where all income-earners are taxed the same rate.
The outcome is that the rich would get richer and the poor poorer.
Currently, two flat tax versions are up for a vote.
In the Senate, the tax committee passed a measure Monday where those earning $5,225 and above, (or $10,450 for married couples filing jointly) would pay a 4.75 percent income tax rate.
That plan would take a $575 million bite out of Kansas tax revenues.
The House proposal levies a 5 percent flat tax on personal incomes above $15,000; sets a 5 percent flat tax on corporations, and reduces the surtax rates for banks, trusts, and savings and loan associations by more than 50 percent.
Currently, corporations pay 4 percent on taxable income with a 3 percent surtax on that above $50,000 in taxable income.
The House measure would cost the state an estimated $1.5 billion in tax revenue.
If enacted, top wage-earners would receive an average tax cut of $11,510 while the bottom 20 percent would realize a savings of $192.
Current law has a tiered system on the amount earned; Those who make up to $15,000 are taxed at a 3.1 percent rate; incomes from $15,000 to $30,000 at 5.2 percent; and those above $30,000 at 5.7 percent.
OPPONENTS of income tax brackets argue the wealthy are being unfairly targeted for their success and that in a “fair” world there should be no discrimination between rich and poor.
That is taking victimhood to a new level.
Proponents of a tiered income tax system believe those with high incomes can afford to pay more in taxes while maintaining a high standard of living while low-income households struggling to meet their daily needs should not face as big a tax burden.
Both of the proposed income tax plans would be a blow to the Kansas budget and eventually require either a cut in services, an increase in either sales or property taxes, or a combination of both.
On Monday afternoon, Senate President Ty Masterson said its tax committee’s plan could be revenue neutral by repealing the newly enacted food sales tax cut and instead allow only “healthy” food items be tax-free.
