Push underway to implement flat tax in Kansas
WICHITA, Kan. (KWCH) – Kansas is trying to introduce a flat tax in the state. The Kansas Chamber of Commerce has already presented its idea of a 5% tax on personal income and the corporate income tax rate. With new numbers released Monday, the Treasury Department said it could cost the state about $1.5 billion in revenue from 2025 onwards.
Currently, Kansas has a tiered tax structure, meaning that an individual’s income or a corporation’s income determines the tax rate. The Republican leadership in the Kansas legislature says one of their goals in this session is to simplify and streamline the state’s tax legislation. But Gov. Laura Kelly has previously said she would oppose any tax proposal that would undermine the state’s fiscal stability.
In Kansas, the current tax rate starts at 3.1% for people with annual incomes of less than $15,000. It rose to 5.25% for those between $15,000 and $30,000. The 5.7% rate applies to those with an annual income of $30,000 or more. A flat tax would eliminate all that and put everyone on the same rate.
Friends University political science professor Dr. Russell Arben Fox said there were supporters and opponents of the proposed flat tax in Kansas.
“Most economists recognize that flat tax regimes are almost necessarily regressive,” he said. “They end up hurting people on low incomes more.”
dr Fox also discussed the other side.
“There are some people who are pushing that back and saying that [there are] Benefits of a flat tax that will be more popular and easier to administer to taxpayers.”
dr Fox said a flat tax is often more popular with higher earners, who often vote for Republicans and find them appealing for their simplicity.
He said it could be likened to sales taxes; When an item is bought, everyone pays the same tax on it.
“If you’re making less than $300,000 a year and you have to buy a gallon of milk and pay taxes on it, it’s a much smaller drain on your wealth than someone making less than $30,000 a year,” said Dr . Fox.
He said right now he sees any flat tax proposal as a message rather than concrete policy. There is also the memory of former Kansas Governor Sam Brownback and his tax experiment.
“I would say that on the Republican and Democrat side, Sam Brownback’s legacy, both positive and largely negative, is very, very real,” said Dr. Fox.
12 News reached out to the Kansas Chamber about its flat-tax plans and fiscal blow to eliminate $1.5 billion in federal revenue starting in 2025.
In a statement, the chamber said that was not surprising, adding that it looked forward to working with lawmakers at this session on comprehensive tax reform and said it was needed to make Kansas a more competitive and attractive place to be to make the state a place to live and work.
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