Income Tax: Not in Kansas Anymore?
If Gov. Sam Brownback (R-Kan.) has his way, Kansas could become a real-life example of regressive economic policy.
He has proposed cutting and eventually eliminating the state's income tax, raising sales taxes, and eliminating tax credits for items like food and child care. "My focus is to create a red-state model that allows the Republican ticket to say, 'See, we've got a different way, and it works,'" Brownback said recently.
Last week, the Wall Street Journal dubbed it the "Brownback experiment," and reported that it has inspired similar proposals in Indiana, Louisiana, North Carolina, Ohio, and Oklahoma.
The plan could be a substantial setback for equity and prosperity in Kansas. One round of tax changes is already in effect, and a second is currently under consideration in the state legislature. If both are implemented, the top one percent of Kansans would pay over $27,000 less per year in taxes, while the bottom 20 percent would pay $95 more, according to the Institute for Taxation and Economic Policy. ITEP says that the cuts would cost the state over $1 billion in yearly revenue.
Brownback's office argued that the economic growth stimulated by a friendlier business environment will recoup the lost funds. Annie McKay, executive director of the Kansas Center for Economic Growth, disagrees.
"It's a collision course any way you slice it," McKay told Campus Progress. She said Brownback's plan will put the state in the red, forcing it to "either raise taxes—which is an unpopular prospect in a state like Kansas—or to drastically reduce budgets."
If the recent past is any indication, Kansas will choose the drastic budget cuts. Brownback has cut thousands from welfare rolls, eliminated thousands of state jobs, and turned most of the state's Medicaid system over to private insurers. The state also has not restored deep cuts made during the recession to public schools, higher education, and mental health service provision.
"I think the conversation is being dominated by people who want to suggest that the only way to lure business and grow the economy is through reducing income taxes, and there are a lot of studies that say that is absolutely not true," McKay said.
"It's a race to the bottom," she said, "and not any bottom that we want to be at."