Kansas tax cut for seniors helps offset rising property tax; why does no one notice? | Opinion

If you’re politically liberal in Kansas, you usually don’t have much to cheer about when the Republican-dominated Kansas Legislature is in session.

But this year was different. Liberals won a huge victory this past legislative session with the elimination of income tax on Social Security.

How is that a big win for liberals? Because it represents a progressive (another word for liberal) approach to tax policy.

The Social Security exemption was arguably the most significant aspect of the tax reform package that cleared the Legislature in its final days, although it never got the public attention it deserved.

The Social Security exemption won’t mean much to the super-rich — like Kansas oil barons Charles Koch, David Murfin and Wink Hartman — but it’s a big deal to low-income and middle class senior citizens.

The most you can get from Social Security is $4,873 a month, based on your earning history. That’s pocket change to the super-rich, but an essential lifeline of income to the masses in lower income territory. That also means the Social Security exemption is a much more significant change for the lower tax brackets. Call it progressive, liberal tax policy that makes common sense.

Here’s the broad brush of its impact:

All Social Security recipients are now state income tax free. In 2007, the legislature exempted Social Security taxes for households making less than $50,000 annually and bumped it to $75,000 the next year.

This year, the Legislature and Gov. Laura Kelly took it to the next level. By exempting all Social Security recipients, the benefit was extended to the mass of middle-income taxpayers whose household income exceeds $75,000. Overall, more than 100,000 taxpayers will reap an annual benefit of $130 million.

Wichita Rep. Tom Sawyer, top Democrat on the House Taxation Committee, agrees that the Social Security exemption never got the attention it deserved.

He also said the public response was overwhelming throughout the process, because senior citizens were well aware of the financial implications of the Social Security exemption.

News stories about the tax plan would usually mention the Social Security component in passing, paying more attention to changes in the tax rates that affect all taxpayers.

Senior citizens apparently were paying more attention to the tax cuts than most Kansans. A recent Kansas Speaks poll by Fort Hays State University found that just 4.6% of the 645 respondents knew about any of the tax cuts passed by the 2024 state Legislature.

If lawmakers had any marketing sense, they would have billed the Social Security exemption as “The Great Property Tax Relief Bill For Senior Citizens.”

The missed opportunity for legislators was to describe this change as a major offset against the outrageous increases in property taxes fueled by rising property valuations.

It was a sharp departure from the days of Gov. Sam Brownback and his tax cuts that mainly benefited wealthy taxpayers and nearly bankrupted the state’s budget.

“I was really pleased with the whole tax package,” Sawyer said. “Brownback’s plan was totally opposite. It was geared to the top end of taxpayers.”

Senate President Ty Masterson, Wichita Republican, still defends the Brownback plan, but agrees that the Social Security exemption was a much needed offset not only against property taxes, but generally against inflation.

“It was 100 percent meant to be an offset for fixed income taxpayers,” Masterson said.

That’s great, but the real test will come the next time the Legislature looks at tax cuts. Will they return to the Brownback disaster or stick with the progressive model that ended the Social Security tax?

For now, senior citizens can get used to a future of state tax-free Social Security benefits.

And when they sit down to write the check for those outrageous property taxes on their homes, they should say a word of thanks to the good liberal minds who helped ease the pain by exempting Social Security from state tax.

This story was originally published October 30, 2024 at 5:18 AM.