Gov. Sam Brownback stands to score a political victory if he can convince the Legislature to pass a flat tax at a time when numerous lawmakers seek to dismantle his signature 2012 tax policy.
The 2012 tax cuts took Kansas from three tax brackets to two. A flat tax would take the next step, setting a single tax rate for all.
Brownback said Wednesday that he would sign a flat tax bill that’s in the Senate. It was the first time this session that he has explicitly endorsed a tax proposal under development by lawmakers.
The Senate is expected to debate the measure on Thursday. Lawmakers seek to address a projected budget shortfall of more than $1 billion over the next two years.
The bill Brownback is backing, Senate Bill 214, would tax personal income at 4.6 percent. Kansas now taxes personal income at 2.7 percent and a higher rate of 4.6 percent. The higher rate applies to individuals who make at least $15,000, or married couples who make $30,000 or more.
But the bill would also repeal a provision of law that exempts certain business income from taxes. Brownback has fiercely defended that component of the 2012 tax policy.
Critics – which include Democrats as well as a significant number of Republicans – say the policy is a loophole and unfair. Brownback says it helps small business.
A ‘huge victory’
A flat tax would be a “huge victory” for Brownback even if he gives up the business exemption, said Bob Beatty, a political science professor at Washburn University.
“If he comes out of this with a flat tax, he still is able to say Kansas is leading the way on conservative economic principles,” Beatty said.
“The flat tax has been an El Dorado, a Shangri-La for conservatives for years.”
Multiple polls over the past two years have shown high levels of dissatisfaction with Brownback, and Republican lawmakers have become increasingly willing to oppose him. Speculation continues to swirl that he may leave Kansas to take a job in the Trump administration – potentially an overseas posting working with the United Nations.
Brownback said in a statement a flat tax makes taxes “fair for everyone” and encourages economic growth.
“The Senate’s flat tax legislation creates a single low tax rate for Kansans, solving today’s budget challenges without unnecessarily harming economic growth in Kansas,” Brownback said.
Passing a flat tax could prove challenging, however.
The Legislature breaks down roughly between conservatives, moderates and Democrats. Crude political math suggests the bill needs the support of two of the three groups to pass.
Democrats have already come out against a flat tax. House Minority Leader Jim Ward, D-Wichita, said a flat tax is a “fundamentally terrible idea.”
“I’d be shocked if there’s 21 votes, let alone 63 in the House, for that plan,” Ward said, referring to the number of votes needed in the Senate and House to pass bills.
Moderate Republicans are also likely to be skeptical, if not opposed. Voters elected a number of new moderate Republican lawmakers this fall after many of them campaigned as a check on Brownback and promised to fix the state’s budget problems.
“Could I laugh any harder?” Sen. Barbara Bollier, a moderate Republican from Mission Hills, said in response to the idea that moderates would support the bill.
‘What is the motivation?’
A flat tax could draw support from conservative Republicans who have previously voted against tax increases.
Last month, conservative lawmakers said they were developing a flat tax plan. Within the last couple of weeks, tax committees in both the House and Senate advanced flat tax proposals.
But some conservative senators appeared caught off guard Wednesday by Brownback’s actions.
“What is the motivation behind the governor inserting himself at this point in the session?” asked Sen. Julia Lynn, R-Olathe. “Does he think we’re not doing our work? Is he not happy with what has been produced so far?”
Contributing: Hunter Woodall of the Kansas City Star