The Examiner: Poorer Kansans pay higher percentage of taxes than wealthier Kansans
media mentionJanuary 31, 2013
By: James Jordan
A study by a non-partisan research group says the poorest Kansans pay a higher percentage of their income in state and local taxes than do the state’s wealthiest residents.
The study, released Wednesday, Jan. 30, 2013, shows a national trend in this direction. The Institute on Taxation and Economic Policy found every state taxes low to middle income families more than wealthy families.
According to the study, the poorest 20 percent of Kansans pay 10.3 percent of their income in state and local taxes. The wealthiest one percent, whose who make more than $450,000 per year, pay only 3.9 percent. Only 13 states have a higher disparity than Kansas and only 11 states have the wealthiest one percent paying a lower percentage of their income in taxes.
In Kansas this is due in part to large cuts in income taxes passed by the Kansas Legislature last year. Gov. Sam Brownback also wants to keep a sales tax that was set to expire this year to make up for some of the property tax cuts.
Two Harvey County legislators say these cuts put the system out of balance. State Sen. Carolyn McGinn, R-Sedgwick, calls it a tax shift. State Rep. Don Schroeder, R-Hesston, said a sales tax is more regressive than income tax.
Much of this is due to last year’s cuts, and there may be more to come.
Some groups, such as the Kansas Chamber, want even more tax cuts, and Gov. Sam Brownback has said he wants to eventually do away with income tax altogether. Last year’s cuts have resulted in a $264 million shortfall for this year, and the current legislature will have to make up that deficit. With lower income tax, the only other options are property taxes or sales taxes, which end up costing less wealthy people more.
“Much of the focus over the past few years has been on cutting income taxes. I think this report makes clear that what is really going on is a tax shift,” McGinn said.
She said that while having low taxes is good for the economy, “having a balanced tax policy is also important to the economy.”
Shroeder said the lowest income group pays a higher percentage because they are spending all their income to survive, and wealthier people have some money left over to invest.
It is not only income tax that impacts poorer people, he said.
“Having sales tax on grocery food items contributes greatly to higher percentage paid by low income residents as much of their income is spent on food.
“That is why the discussion on sales versus income taxes is so important. Sales tax is regressive, and income tax is progressive because, quite simply, if someone makes more income they pay more tax,” Schroeder said.