Just a few years ago, Kansas overhauled its state income tax to give a tax break to its wealthiest residents. Lawmakers had pitched this policy change on the promise that it would stimulate the economy and encourage growth. They are now dealing with the reality that it failed on both accounts and has left the state with an over $143 million gap in their 2016 budget.
Instead of looking to fill this gap by dialing back the tax breaks for top earners, the Kansas legislature is proposing raising the sales and excise taxes to increase revenue. These taxes are forms of regressive taxation that would disproportionately impact working class Kansans, and it’s all being done in an effort to maintain tax cuts to the wealthy.
According to a recently released report issued by the Institute on Taxation and Economic Policy, the bottom fifth of wage eaners in Kansas pay an average of 11.1% of their total earnings in state and local taxes. Meanwhile, the wealthiest 10% of the state’s residents pay just 3.6% of their total income on these taxes.
Pursuing this tired policy of “trickle down economics” and forcing the working class to pay for tax breaks for the wealthy will do little to nothing to help the state’s budget or economy. The Kansas legislature should explore common sense proposals known to spur growth and provide economic mobility for the residents of their state, including asking the wealthiest Kansans to pay their fair share of taxes instead of maintaining these tax cuts at the expense of their hard working middle and working class citizens.
From The Washington Post:
“Wealthier Kansans are paying much less in taxes after Republican Gov. Sam Brownback overhauled the state’s income tax a few years ago. Brownback and other Republican officials hoped that more generous policies would stimulate the economy, bringing more revenue into the state’s coffers and making up the difference on the bottom line.
It didn’t work. Kansas’s economy has kept expanding at more or less same plodding pace as the rest of the country. And now, according to official estimates released Monday, the state will have at least a $143 million budget shortfall in 2016, and likely more. Lawmakers are looking for a way to plug the hole.
One thing they’re not considering: asking the wealthy to chip in. Instead, in a legislature that last week barred welfare recipients from using their benefits to go swimming or watch movies, the proposals that look most likely to succeed are sales and excise taxes that would be paid disproportionately by Kansas’s poor and working class.
“You’ve got policymakers at this point who are unable to embrace the fact that there was a mistake made,” said Annie McKay, the executive director of the left-leaning Kansas Center for Economic Growth. The think tank in Topeka argues that the state’s deficit can’t be eliminated without reversing some of the income tax cuts Brownback made in 2012.”
You can read the full article here.