The best way to fund state services and programs is a fair tax code.
So when Kansas legislators propose to eliminate a tiered income tax program in favor of a flat tax rate, take note that they’ll have no choice but to cut critical programs and services.
As proposed, a flat tax rate of 5 percent on personal incomes above $15,000 as well as generous tax breaks for corporations and financial institutions would cost the state an estimated $1.5 billion a year.
“Once you start making those kinds of cuts, you have to start cutting services,” notes Gov. Laura Kelly, who is opposed to a flat tax.
Such a tax rate would disproportionately favor the wealthy. The top 1 percent of filers would receive about $11,500 in tax breaks; the lower 20 percent about $190.
Were legislators to instead eliminate the food sales tax outright, as Gov. Kelly has proposed, the estimated savings is $500 per household.
Not only would that savings be more widespread, but the dent to the budget would be significantly less. When fully implemented, eliminating the tax on food will cost the state an estimated $411 million — a far cry from if a flat tax rate were imposed.
WHEN THE food sales tax legislation was signed last spring, Republican legislators said they favored a stair-step reduction over the next several years because an extreme downturn in the state’s economy had to be anticipated, said House Minority Leader Dan Hawkins, R-Wichita.
What’s made the difference in the last eight months to encourage Hawkins to endorse the way more extravagant flat tax?
Not a thing.
Over the past several years Kansas has built up enough reserves to withstand a minimal dip in tax receipts — but not raid the cookie jar.
FOR THE PAST 50 years, the United States has made significant progress in reducing poverty and economic insecurity for its citizens starting with food stamps in 1974, Supplemental Security Income for the elderly and disabled in 1974, the Earned Income Tax Credit in 1975 and the Child Tax Credit in 1997. The latter two tax credits alone have lifted more children above the poverty line than any other individual programs by helping young parents make ends meet and by making housing more affordable.
Expanding Medicaid eligibility for adults has also strengthened the health care safety net, a fact that we fervently hope is not lost once again on our lawmakers. Kansas remains one of only a dozen states not to expand the health insurance program.
Despite this national progress, one in four households faces hardships in affording food, clothing and shelter.
Their biggest hurdles? The high cost of housing, child care and health coverage.
THE BEST way for Kansas to grow is from the bottom up.
