The Wichita Eagle: League of Women Voters speaks out against Kansas income tax plans
media mentionBy BRENT D. WISTROM
Eagle Topeka bureau
Published Saturday, April 21, 2012, at 5:33 p.m.
TOPEKA — The League of Women Voters of Kansas, usually noted for their opposition to laws they feel create barriers to voting, stepped out late last week against the two income tax reduction bills being debated by House and Senate negotiators.
The organization is urging people to tell representatives they oppose the plans because the proposals would shift the tax burden more toward low-income residents.
League President Ernestine Krehbiel said eliminating income taxes for businesses large and small would cut into revenue used for other state services and that could mean further strain for state courts, schools and programs that help the needy.
“How far can we cut in Kansas and not get to the place where we’re losing the very things that make this state have a wonderful quality of life?” she asked.
The League cites an Institute on Taxation and Economic Policy study of tax plans proposed by Gov. Sam Brownback and those approved by the Senate and House as evidence of potential inequity. The study, released in March, shows the poorest 20 percent of Kansas taxpayers who make less than $11,000 would pay 1.3 percent more of their income taxes a year – or about $148.
The nonpartisan Institute, which some have branded as liberal-leaning, says the House plan would keep it about the same for the lower 20 percent while boosting upper-income taxpayers.
Dozens of studies have been presented boasting the benefits of cutting taxes and warning of the perils, making it difficult for many in and outside of the Statehouse to know what is accurate.
“There’s just not been enough shown on this issue for the public to speak out and give their positions,” Krehbiel said.
On that, Sen. Les Donovan, R-Wichita, agrees. But he says many people don’t understand the limited impact on the poor.
Kansas has one of the higher returns for low-income working families through its earned income tax credit, he said. Reducing that doesn’t require them to pay more taxes; it decreases the size of the check they get back, he said.
“If you’re not paying any tax and instead you get a check back from the state and federal government and some of that is taken away from you, of course what you pay is going to go up,” he said. “You’re going from below zero to somewhere closer to zero.”
According to the Tax Credits for Working Families website, which tracks rates nationwide, Kansas pays 18 percent of the federal earned income tax credit. Missouri doesn’t provide the credit. Colorado and Nebraska pay 10 percent of the federal rate and Oklahoma pays 5 percent. Several states are above 20 percent.
Donovan said he doesn’t know anyone who wants to shift the tax burden to lower-income people. And he said he’s concerned people may not understand the impact of evolving tax plans.
“It’s not a cut and dry, black and white situation,” he said.
House and Senate negotiators haven’t formally agreed on anything.
But they have indicated they’re likely to phase out nonwage income taxes for limited liability companies, subchapter S corporations and sole proprietors. They’re also leaning toward cutting the earned income tax credit from 18 percent to 9 percent in 2014.
Meanwhile, they’ve said little about how much they will dial down individual income tax rates.
Both plans have massive price tags that grow through the years. But conservative lawmakers say businesses will invest the additional money and create jobs, bringing more people to the state and driving up state revenue from property and sales taxes to offset decreases in income taxes.
House and Senate negotiators plan to resume reconciling differences between the tax reduction plans approved by the House and Senate next Wednesday afternoon.
Donovan said he’s hopeful that the conference committee can advance a bill for the two chambers to vote on. But he noted that the political dynamics in Kansas are changing.
“There’s no such thing anymore as Republicans being this way and Democrats being that way,” he said. “It’s within the party now. I’m hoping we can rise above the inter-party bickering. But I don’t have a lot of hope that we will.”