Government & Politics

Kansas flat tax proposal gets lukewarm reception in House committee

A proposal to move to a flat tax rate in Kansas got a tepid reception by a House committee.
A proposal to move to a flat tax rate in Kansas got a tepid reception by a House committee.

Kansas conservatives have been pushing for a flat tax, but the version a House panel began working on Tuesday might not have enough support to go much further.

The state would tax Kansans’ income at a flat rate of 5 percent under a plan that is estimated would bring the state roughly $870 million over a two-year span.

The legislation, an amended version of another House bill, is the latest effort to address the roughly $1 billion in projected budget shortfalls the state faces through June 2019.

But the bill, which would raise income taxes on many in the state, was panned by Democrats on the committee, and some Republicans were hesitant to offer support.

Rep. Kathy Wolfe Moore, a Kansas City, Kan., Democrat, called the bill “patently unfair.”

“I’d probably choose fairness over simplicity every day,” she said.

The House tax committee is expected to vote on the measure Wednesday.

“I think that there is a desire to see if we can put something together that is simpler and still addresses the change that people want,” said Rep. Steven Johnson, the chairman of the House tax committee.

He said a 5 percent rate could be a viable solution for the state’s financial trouble if lawmakers could avoid overburdening taxpayers on the low end.

He noted that lawmakers may also need to move quickly to approve a new position on a tax plan before the Legislature’s first adjournment next week.

But given the bill’s reception Tuesday afternoon, Johnson didn’t sound hopeful about the legislation’s chances in its current form.

“As it stands, no, it doesn’t appear that it has the traction,” Johnson said.

Kansas currently taxes individuals who make less than $15,000 at a rate of 2.7 percent. Those making more than that are taxed at 4.6 percent.

For people married filing jointly, those making less than $30,000 are taxed at the lower rate of 2.7 percent while people making more than that total are taxed at 4.6 percent.

Joint married filers with a taxable income of $12,500 or less and individuals with taxable income of $5,000 or less are exempt from income taxes, according to the Kansas Department of Revenue.

They would continue to be exempt under the flat-tax plan.

The push for a flat tax, backed by some conservatives in the Legislature, stalled last week after two proposals were poorly received after a hearing in the House tax committee.

But changes made by lawmakers to the flat-tax proposal would bring an estimated $373.7 million to the state next fiscal year, according to estimates given to lawmakers by the Kansas Department of Revenue.

The amended bill would also end a tax exemption for roughly 330,000 business owners, referred to by some as the LLC loophole. It would also lower a state food tax to 5 percent in January 2019

Hunter Woodall: 785-354-1388, @HunterMw