What’s the Matter with Kansas’ Tax Policy?

Gov. Brownback wants to eliminate the income tax and force the poor to pay for it.

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Republican presidential hopeful Sen. Sam Brownback, R-Kan., speaks at the Wisconsin GOP state convention Friday, May 11, 2007, in Lake Geneva, Wis.

Kansas Republican Gov. Sam Brownback has presided over one of the most rightward lurches of any state in the nation, on issues such as health care, abortion and education. But the crown jewel of his administration has been a package of cuts to Kansas' income tax – the latest of which was signed into law today – part of Brownback's avowed goal to eliminate that tax in his state altogether.

Yes, you read that right. Eliminate, as in cut to zero. To that end, Brownback is forging ahead with his push for repeal, before Kansans have even had to pay the rates that came with the last cut. "I think we can, I really do," Brownback said this week when asked by the Wall Street Journal if he can succeed in repealing Kansas' income tax, the top bracket of which is now 4.9 percent. "The experiences in some other states have been that when you cut income taxes, that your sales tax increase more than makes up for your income tax cut."

The problem with that approach, however, is that replacing the income tax with a sales tax means replacing a tax largely affecting the well-off with one largely paid by the poor, who are disproportionately likely to spend all or most of their income (thus exposing it to the sales tax). As this chart from the Institute on Taxation and Economic Policy shows, just replacing 50 percent of the revenue lost by eliminating Kansas' income tax with sales tax revenue would seriously wallop those with lower-incomes:

[See a collection of political cartoons on the budget and deficit.]

And it's not like Kansas' tax system was all that progressive before today's tax cut: as of January 2013, the poorest 20 percent in the state paid an average effective tax rate more than twice as high at the richest 1 percent. Brownback also had to make a supposedly "temporary" sales tax increase permanent, due to the loss in revenue the state saw after its last income tax cut became law.

Brownback dismisses concern about the impact all of this has on the poor, saying, "the biggest thing that I think is regressive is people not having jobs … What we're trying to do is to create a very growth-oriented atmosphere so that you're going to have a job."

[See a collection of political cartoons on the economy.]

But a host of economic evidence shows that states with low or no income tax don't create more jobs than higher tax states. A different Institute on Taxation and Economic Policy study shows that, between 2002 and 2011, states with no personal income tax experienced job growth that was essentially identical to that in "high tax" states, while the high tax states had better economic growth overall and less decline in personal income. In fact, "six of the nine states without income taxes had higher than average annual unemployment rates over the last decade: Texas, Florida, Tennessee, Washington, Alaska, and Nevada."

Analysts from the left and right blasted Brownback's previous tax cuts as the worst tax plan in the nation. Eliminating the income tax would turbo-charge those bad ideas, making Kansas a true id of modern-day conservatism.

But perhaps that's the point? As Mark Binelli details in Rolling Stone, Brownback's policies may be aimed more at the 2016 presidential race – and GOP primary voters in Iowa and South Carolina – than they are at Kansas' economy. It may be that poor Kansans are simply being asked to pay the price of Brownback's political ambitions.

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