To the editor,
There was a time when Kansans could say, ‘thank goodness for Nebraska; otherwise, we would have the highest tax burden in the region.’ But now that the Nebraska Legislature passed major tax relief this year, Kansas is the worst.
Kansas’s top marginal income tax rate is 5.7%, whereas Nebraska will eventually be at 3.9. Missouri is 5.3%, Oklahoma is 4.75%, and Colorado is 4.4%.
A recent opinion column by John Sturn opposing tax cuts warned of a “fiscal train wreck” if Kansas cut taxes based on his understanding of what occurred the last time Governor Brownback tried it. Many of the claims back then were based on incomplete or inaccurate data, but Kansas did have serious budget challenges and most of that was avoidable. Many implementation mistakes were made and other circumstances created budget issues, including a very toxic political environment.
Governor Brownback and legislators in both parties knew a deficit was coming within two years, but they spent more instead of eliminating some wasteful spending. Republicans and Democrats alike share the blame for not taking advantage of opportunities to balance the budget, as some legislators in both parties wanted tax relief to crash and burn for their own political reasons.
That sordid story and many other mistakes are detailed in our 2018 book, What Was Really the Matter with the Kansas Tax Plan. Contact our Overland Park office if you’d like a complimentary copy.
Some myths about a flat tax also need to be addressed.
The flat tax proposal that almost passed this year (5.15% in Senate Bill 169) would not create deficits, as government projections show healthy cash reserves long after implementation and continued spending increases.
Also, the plan ensures that every individual gets a tax cut. Opponents say a flat tax isn’t fair because people with higher incomes save more money, but that’s because they pay most of the taxes. Department of Revenue data shows people with adjusted gross income (AGI) below $50,000 account for 17% of all AGI, but they only bear 9% of the income tax burden. On the other hand, those with AGI above $100,000 pay 70% of the tax burden even though they only have 61% of all AGI. More people with low incomes will also be exempt from income tax.
The Kansas economy would also improve with an income tax cut because the data shows states with lower tax burdens have superior job growth and economic activity. In fact, the ten states with the lowest state and local tax burdens have four times the private-sector job gains as Kansas since 1998. Kansas is in its fifth straight decade of trailing the national average on job creation, and that won’t change with an unnecessarily high tax burden.
Why did Governor Kelly and Lt. Governor David Toland push the Legislature to approve a $1 billion handout to Panasonic for an electric car battery plant in Johnson County, but a much smaller tax break for Kansas taxpayers was vetoed? Some of the same legislators who approved the Panasonic handout – Republicans and Democrats alike – voted against the veto override and denied you income tax relief.
Legislators will have another chance to give Kansans a break when they convene in January. Excess tax collections have led to $4 billion in reserves, so the money is there to reduce income tax for everyone and still have a healthy surplus.
Dave Trabert is CEO of Kansas Policy Institute, a nonprofit organization that protects constitutional rights, works to improve student achievement, and reduce taxes on all Kansans.