The Republican-controlled Kansas House of Representatives on Thursday approved legislation that would set a single rate on state income taxes, setting up a likely veto from the Democratic governor.
But a veto is perhaps less certain than past plans Gov. Laura Kelly has struck down. Republicans included some provisions in the bill that Kelly supports in addition to the flat income tax she has opposed in the past.
Key provisions in the bill include eliminating taxes on Social Security income, reducing state property taxes and implementing a single income tax rate of 5.25% for all annual income over $6,150 — or twice that for married couples filing jointly. Kansas currently has three income tax brackets.
The governor’s office has already hinted that she is skeptical of the proposal.
“Kansans have seen reckless tax experiments that hurt our schools, roads and economy before, and they don’t want to go back,” said Brianna Johnson, communications director for the governor, in a written response to the GOP-sponsored tax bill.
If Kelly does veto the plan, the House appears to have the two-thirds majority needed for an override, with support from most Republicans and Democrat Marvin Robinson. But the bill did not reach that majority in the Senate, with opposition from two Republicans and independent conservative Sen. Dennis Pyle.
Republicans who support the flat tax say it would benefit the economy and that the state has enough of a budget surplus to sustain the cuts.
Republican Rep. Adam Smith, chairman of the House’s tax committee, said income tax should be treated like any other tax.
“I can’t think of a more simple tax code,” Smith said. “If you disagree, I’d like to ask you, if this single-rate tax concept is OK for sales and property tax, why is it not also OK for income tax?”
Critics of a flat tax say it would primarily benefit the wealthy and create budget shortfalls, a sentiment shared by Kelly and most Democratic lawmakers.
Democratic House Minority Leader Vic Miller said he believes Kansans prefer high-income earners to pay higher income tax rates than lower earners.
“The public is the reason we have a progressive income tax,” Miller said.
With a state budget surplus, rising costs of living and a looming election, both Republicans and Democrats have said passing tax relief this session is necessary.
Other key pieces of the tax bill include tying the standard deduction to inflation and raising personal exemptions, eliminating the food sales tax in April rather than next year and raising the exemption on residential state property taxes from $42,000 to $100,000.
The bill would cost an estimated $1.6 billion in state tax revenue over the next three years, according to legislative researchers. Of that, about $300 million per year would come from the single-rate income tax.
Democrats raised concerns that most of the benefit would go to higher-income Kansans. Rep. Tom Sawyer said more than half of the tax relief from a flat income tax would go to people who make more than $250,000 a year.
Smith responded by saying tax relief corresponds to how much each person contributes in taxes.
“The highest income taxpayers pay approximately that 50% of the tax,” he said. “Any change you make to the tax code – they’re going to get a majority of that benefit because it’s proportional.”
Once the bill reaches Kelly’s desk, she has 10 days to sign the bill, veto it or let it become law without her signature.
Daniel Caudill reports on the Kansas Statehouse and government for Kansas Public Radio and the Kansas News Service. You can email him at dcaudill@ku.edu.
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