January 13, 2012


Winners and Losers in Brownback’s Tax Plan
by Peter Hancock | The Kansas Education Policy Report

Gov. Sam Brownback’s tax proposal would result in significant tax hikes for many Kansans and equally significant tax cuts for others, according to analysis from the Kansas Department of Revenue http://ksedpolicy.com/blog/wp-content/uploads/2012/Documents/BBK-TaxPolicyImpact-20120113.pdf.

Furthermore, even if one assumes that it would spur economic growth (the administration’s projections assume 5.9 percent annual growth, instead of the standard 4 percent used by the Consensus Estimating Group), the Department of Revenue says the net impact on total state revenues would be a loss of nearly $400 million over the next six years.

Consider, for example, a single parent with one child and an adjusted gross income of $20,000 per year. Under current law, if that person took the standard deduction, he or she owe no state income tax and, instead, would get a $382 refund through the Earned Income Tax Credit, which Brownback proposes to eliminate.

Under Brownback’s proposal, that person would owe $60 in state income tax – an increase of $442.

If that same person itemized their deductions, he or she would likely owe $66 in state income tax instead of getting a $387 refund – an increase of $453.

By contrast, a married couple filing jointly with $55,000 in business income, plus $20,610 in wage income, would save nearly $300 in state income taxes, seeing their total tax bill drop from $1,962 to $1,664.

The estimates of how the plan would affect different groups of taxpayers were distributed to legislators Thursday during a briefing before the House and Senate tax committees. But they were not included in the packet of material distributed to reporters and the public. They were made public today during a news conference by Democratic leaders.

During a media briefing just moments after the legislative briefings, Budget Director Steve Anderson told reporters that the plan would be “almost revenue-neutral,” largely because the tax cuts would stimulate consumer spending and economic growth.

Peter Hancock publishes The Kansas Education Policy Report. For more information, go to www.ksedpolicy.com.