By STEVEN HOWE
Kansas State Rep. (R-71)
Did you know that seven states in the U.S. do not have a state income tax? In Kansas we have a graduated income tax system with a top marginal rate of 5.70%. Neighboring states have top marginal rates much lower than Kansas including Missouri at 4.80%, Oklahoma at 4.75%, and Colorado is even lower at 4.40%. To be regionally competitive, it is imperative that we reevaluate tax policies that may hinder investment in Kansas.
That is why I was glad this legislative session to join the majority of lawmakers in supporting tax relief for all Kansans through the passage of HB 2284. Unfortunately, the Governor vetoed this measure, and the votes to secure the override came up three votes short last week in the Kansas House. Proponents of the veto, including the Governor, claim the bill is “reckless,” “does next to nothing for the middle class,” claims it would “overwhelmingly benefit the super-wealthy,” and the Governor proclaimed, “I’m not going to put our public schools, roads, and stable economy at risk just to give a break to those at the very top.”
Unlike the days under former Governor Brownback, we now have a Budget Stabilization Fund (also known as the “Rainy Day” fund) with a balance of $1.6 billion dollars. We also have another surplus of $2.4 billion dollars in the State Treasury – that’s $4 billion dollars folks! Furthermore, HB 2284 considers the most conservative modeling to forecast future declines in revenue to measure long-term budget stability. HB 2284 passed these stress tests.
While each of us is entitled to our own opinions, we are not entitled to our own facts. I want to share with my constituents what HB 2284 would have accomplished. In short, this tax relief bill is comprehensive and would not only make changes to the state income tax, but also to sales tax and property tax – the three-legged stool of Kansas’ tax structure.
First, the state income tax. As mentioned earlier, Kansas has a graduated income tax system with three tax brackets. If your household income is $5,000 or more (up to $30,000), your tax rate is 3.10%. If your household income is $30,000 or more (up to$60,000), your tax rate is 5.25%. If your household income is $60,000 or more, your tax rate is 5.70%. HB 2284 would have created a single income tax rate at 5.25%. It is true that those making over $60,000 in household income will see an income tax reduction with the simplified single rate. But more importantly, it’s also true that ALL Kansas income tax filers will see a reduction in their income tax.
Here’s how…
â—Ź The point of taxation is raised to $6,150 for single filers and $12,300 for married couples filing jointly.
For example, under the current rate, if you make $5,000 – you’ll pay 3.10% in income tax. However, under HB 2284, you would pay zero income tax.
● Standard deductions would remain the same at $3,500 for single filers and $8,000 for joint filers — PLUS a cost-of-living adjustment to automatically adjust for inflation.
â—Ź Personal exemptions would increase to $2,300 (up $50/person) -- PLUS a cost-of-living adjustment to automatically adjust for inflation.
Let’s review how the combined effect would benefit Kansas joint filers under HB 2284:
Add the standard deduction ($8,000)
Plus, the personal exemption ($4,600)
Plus, an additional $12,300 (point of taxation)
This equals a total of $24,900 which is tax free -- ZERO income tax under HB 2284. That’s a benefit to every single Kansan, especially those on the lower income scale.
What about the disproportional benefit to the rich that you may have read about on social media or from other media sources? Did you know that in Kansas, 20.6% of tax filers making $100,000 or more currently account for paying 74% of all income tax? Under HB 2284, this group would continue to pay the largest piece of the income tax pie – over 70%. The “rich” or “super wealthy” do not receive a greater proportion of income tax reductions compared to low-income earners. However, those on the lowest end of the tax bracket will have no tax liability (if earning less than $24,900).
HB 2284 would have also finally erased an injustice to those who receive Social Security income. It would have fully repealed the state income tax on Social Security! That’s right – your Social Security would no longer be taxed in Kansas. Additionally, HB 2284 would have fast-tracked the state income tax on food to 0% on April 1, 2024, instead of waiting for it to occur on January 1, 2025. Lastly, the bill would have increased the amount of residential property exempt from the statewide uniform 20 mill levy from $40,000 to $100,000 of appraised value.
According to the Kansas Department of Revenue, if HB 2284 was enacted, over 400,000 Kansans would no longer have an income tax liability – currently it is just over 30,000 Kansans without an income tax liability. It is unfortunate that the opponents of this bill use election year rhetoric to scare you into believing the worst in things. It’s not a perfect bill, but it did enjoy the support of over 84% of Kansas lawmakers. It’s unfortunate that 16% of lawmakers and the single-stroke of the Governor’s veto pen stood in the way of getting Kansans much needed tax relief.
Today, the Legislature will begin day #48 out of our allotted 90-day session. All hope is not lost. It is back to the drawing board. I will continue to work with my colleagues to provide much-needed tax relief for all Kansans.
If you need to contact me this session, the best way is to contact me by email at [email protected] or by calling my Capitol office at: 785 296-7642.