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Kansas isn’t much of an Occupy Wall Street-type state. But Gov. Sam Brownback’s tax-reform plan, which raises taxes on the poor while cutting taxes on the wealthy, might turn it into one.
It’s certainly causing people, including some fiscal conservatives, to scratch their heads and wonder what the administration is thinking.
“It’s wrong to increase taxes on one group of people while providing tax relief to another,” said Dave Trabert, president of the Kansas Policy Institute.
Brownback’s plan would lower the state’s highest income-tax bracket from 6.45 to 4.9 percent. The lowest tax bracket would drop from 3.5 to 3 percent.
But because Brownback also wants to eliminate several tax deductions and credits, Kansans who earn less than $25,000 a year – more than half a million tax filers – would end up paying an average of $156 more in income taxes. Meanwhile, those making more than $250,000 a year – about 21,000 taxpayers – would see an average cut of $5,200.
All total, low-income taxpayers would pay $88.2 million more in taxes under Brownback’s plan while the wealthy would pay $110 million less.
“It’s been Robin Hood in reverse,” said Senate Minority Leader Anthony Hensley, D-Topeka.
Advocacy groups are particularly concerned that Brownback wants to eliminate the earned income tax credit, which targets the working poor.
“Gov. Brownback made a commitment to reduce childhood poverty in his ‘road map for Kansas,’” said Kansas Action for Children president and CEO Shannon Cotsoradis. “Doing away with the EITC flies in the face of that.”
In addition to the poor paying more income taxes, they would be disproportionately affected by Brownback’s other regressive tax reform: making the statewide sales-tax increase permanent.
Kansas Revenue Secretary Nick Jordan, who spearheaded the tax plan, defends the tax increase on the poor by arguing that the administration wants to use money it saves by eliminating the earned income tax credit to help increase state funding for Medicaid, which would increase federal matching funds. Though leveraging additional federal money is a good thing, administration officials sound like liberals in making this argument.
“We’re helping, I think, with programs that are targeted, efficient and accountable that will be much more helpful to them than a once-a-year (tax refund) check,” Jordan said.
As Sen. Tom Holland, D-Baldwin City, who was Brownback’s opponent in the 2010 election, responded: “You’re taking control away from the citizen, and you’re having the government make a decision it wants.”
Brownback’s larger goal in cutting taxes is to try to spur economic growth – which he believes will eventually benefit all Kansans, including the poor.
But that hope will be a tough sell for struggling Kansans whose taxes would go up while the rich get richer.
For the editorial board, Phillip Brownlee
