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Kansas considers tax cuts for most residents -- except poorest

February 23, 2012|By Matt Pearce
  • Kansas is considering a measure that would cut taxes for everyone but poor people.
Kansas is considering a measure that would cut taxes for everyone but poor… (Stock image )

Reporting from Kasas City, Mo. — Kansas is considering raising taxes on its poor and cutting them for everybody else.

State Republicans have been campaigning to overhaul the tax code in Kansas to spur growth. The idea is that, by eliminating income taxes for residents and small businesses, lowering the sales tax and ditching a host of tax credits, Kansans will have more money and thus stimulate the economy.

But for the state’s poorest, the devil is in the details.

A Kansas House tax committee passed a bill in which anyone making less than $25,000 a year — roughly half a million of the state’s 2.9 million residents — will pay an average of $72 more in taxes, while those making more than $250,000 — about 21,000 people — will see a $1,500 cut, according to Kansas Department of Revenue estimates cited by the Kansas City Star.

The hike would come from the elimination of tax credits typically benefitting the poor.

The Kansas House bill, still under review by legislative leadership, is actually a less-ambitious version than one initially proposed by Republican Gov. Sam Brownback in which the poorest would pay $156 more in income taxes while those making $250,000 a year would pay $5,200 less. 

The state’s liberals, probably as you’d expect, have been outraged.

“It’s been Robin Hood in reverse,” Senate Minority Leader Anthony Hensley, a Topeka Democrat, told the Kansas City Star in mid-January. “What we are doing is stealing from the poor to give to the rich.”

The state’s conservatives, probably also as you’d expect, didn’t quite see it that way.

"Our goal is for our economy to look more like Texas, and a lot less like California," Brownback said in a Wall Street Journal editorial praising the anti-income-tax plan.

How much like Texas? Kansas’ unemployment rate is among the lowest in the nation, with 6.3% unemployed, according to the U.S. Bureau of Labor Statistics; Texas’ is 7.8%. The USDA’s Economic Research Service  estimates Kansas’ poverty rate to be 13.5%, while Texas’ is 17.9%. 

Reaganomics mastermind Art Laffer is getting paid $75,000 to consult on the state’s overhaul, and he ran into some flak in January when he arrived to give testimony on the new plan, according to the Kansas City Star.

Kansas NOW, which recently sounded the alarm when Topeka symbolically decriminalized domestic abuse because of a municipal funding shortfall, challenged Laffer on the elimination of an earned-income tax credit used by single mothers, according to the Star, to which Laffer responded that the best form of welfare is a high-paying job.

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