Say this about Kansas’ tax reform: It united liberal and conservative finance experts.
They both hate it.
And with good reason.
Governing magazine asked Joe Henchman of the conservative-leaning Tax Foundation and Nick Johnson of the left-leaning Center on Budget and Policy Priorities to name the worst tax-reform effort in the country. They both cited Kansas.
Henchman said the tax bill signed last year by Gov. Sam Brownback encourages tax avoidance and probably won’t do much for the economy. The centerpiece of the reform – eliminating state income taxes on “pass-through” businesses – creates “an incentive to game the tax system” and “violates the tax principle of neutrality,” he said.
Johnson said the tax plan “fails almost every test of good tax policy, starting with adequacy, affordability and sustainability.”
He noted that “it’s beneficial to high-income taxpayers and harmful to low,” and that “because it costs so much money, it will make it harder for Kansas to make other kinds of investments that are important to a strong economy like education and infrastructure.”
That’s already happening. State lawmakers have proposed cuts to higher education and are raiding the state’s transportation plan to help cover the cost of the tax cuts. Brownback also wants to make permanent the temporary statewide sales-tax increase.
Because of these problems, other states are pointing to Kansas as the model of “what not to do,” Johnson said.
State Sen. Les Donovan, R-Wichita, said last year that the reform was “the worst tax bill ever to come out of” the Statehouse.
Experts now agree.
But it’s Kansans – particularly the poor – who are paying the price. And will continue to do so for years to come.