Democrats and Republicans are performing political gymnastics about what constitutes a tax increase during election season.
If the state freezes income tax rates instead of allowing them to drop again in 2016 as scheduled, would that be a tax increase?
Republicans say yes. Democrats say no.
When the state lowered a temporary sales tax last year – but not as much as originally promised – was that a tax increase?
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Democrats say yes. Republicans say no.
The semantic debate comes after Paul Davis, the Democratic candidate for governor, proposed freezing income tax rates at their 2015 levels until base school funding is restored to pre-recession dollars. The rates are scheduled to drop further in 2016 and 2018 under a law signed by Gov. Sam Brownback.
An analysis by the state’s nonpartisan Legislative Research Department showed that freezing rates would bring in $735 million in cumulative tax revenue. It also showed that Kansans in the lowest tax bracket would pay 17 percent more in income taxes than they would under the Brownback plan.
Republicans accused Davis of trying to raise taxes on low-income Kansans. Democrats say no one would see their rates increase from what they are now.
Last year, the parties were on opposite sides of a debate over the sales tax.
When Brownback took office, the sales tax was at 6.3 percent. His predecessor, Gov. Mark Parkinson, had signed into law a temporary increase, and the sales tax was set to drop 5.7 percent after three years.
But Brownback signed a bill last year setting the sales tax at 6.15 percent instead of letting it drop back to 5.7 percent. The change was meant to offset some of the lost revenue from income tax cuts.
Republicans framed the sales tax change as a tax cut. Democrats accused the governor of sanctioning a $777 million tax increase and said taxes on groceries and other goods had raised the cost of living for low-income Kansans.
Republicans assert that the changes to the sales tax are not a tax increase but that Davis’ proposed income tax freeze would be.
Meanwhile, Democrats say that not lowering the sales tax to 5.7 percent counts as a tax increase but that not lowering income tax rates does not.
“Paul proposed a commonsense first step to clean up the fiscal mess that Sam Brownback created,” Davis’ campaign spokesman, Chris Pumpelly, wrote in an e-mail. “He proposed freezing the tax rates temporarily – not permanently – until funding for our schools is restored to pre-recession levels. Gov. Brownback raised sales tax rates permanently, even after he campaigned against it in 2010.”
The conservative Kansas Chamber of Commerce accused Davis of trying to have it both ways.
“If setting the sales tax at 6.15 from 6.3 was a tax increase, how can a freeze of cuts not be an increase? Can’t have it both ways,” the chamber’s official Twitter account tweeted Friday.
In response the Kansas Republican Party tweeted, “Tell it to Paul Davis. His only policy agenda after 11 months of campaigning is a tax increase. #failedcampaign.”
That account is managed by Clay Barker, the party’s executive director. Barker wrote The Eagle an e-mail in May to push back against Davis’ criticisms on sales tax.
“It went from 6.3% to 6.15%, that is a reduction, not an increase on the tax payers,” Barker wrote at the time. “Davis’ logical error is he is comparing two potential outcomes: 6.15% with 5.7%, instead of the start point 6.3% and end point 6.15%.”
When asked this week how he could square these two statements, Barker pointed to the overall tax burden.
“I think one of the big differences is when the sales tax was changed – put it that way to be neutral – there was also a big decrease in the income tax, so the net tax burden was reduced on everyone,” he said in a phone call.
John Milburn, Brownback’s campaign spokesman, declined to comment on whether his campaign’s criticism of the Davis tax plan constituted a tacit admission that Brownback raised the sales tax.
He referred to the Legislative Research analysis, which used the phrase “tax increase” to describe the Davis plan.
“Well, Legislative Research has already said that what Davis is proposing would increase revenue over that period of time, so taking their word at it, it’s a tax increase,” Milburn said at a campaign event Monday.
Dakota Loomis, spokesman for the Kansas Democratic Party, acknowledged that the two parties had flipped positions because of the campaign season.
“The short of it is that politicians and campaigns like to present facts in the best light to them,” he said.
Loomis said the real issue should be the effect of the proposed policies rather than the terminology.
“What it seems like is no matter what, Brownback is refusing to admit that there’s anything wrong,” Loomis said, noting that the state faces a $238 million budget shortfall for the 2016 fiscal year. “The next governor’s going to have to deal with that regardless of who it is.”