Push underway to implement flat tax in Kansas

1.31.23 – KWCH – WICHITA, Kan.

The Kansas Chamber of Commerce already introduced its idea, a 5% tax for induvial income and the corporate tax rate.

A push underway in Kansas seeks to implement a flat tax in the state. The Kansas Chamber of Commerce already introduced its idea, a 5% tax for induvial income and the corporate tax rate. With new numbers released Monday, the department of revenue said it could cost the state about $1.5 billion in revenue, starting in 2025.

Currently, Kansas has a graduated tax structure, meaning what an individual makes or a business’s income determines the tax rate. Republican leadership in the Kansas legislature says one of its goals this session is to simplify and flatten the state’s tax code. But Governor Laura Kelly has already said she would stand against any tax proposal that would erode the fiscal stability of the state.

In Kansas, the current tax rate starts at 3.1% for people with annual incomes of less than $15,000. It increased to 5.25% for those between $15,000 and $30,000. The 5.7% rate applies to those with an annual income of $30,000 and up. A flat tax would get rid of all those and set everyone at the same rate.

Friends University Political Science Professor Dr. Russell Arben Fox said there are supporters and detractors to the proposed flat tax in Kansas.

“Most economists recognize that flat tax schemes are almost inevitably regressive,” he said. “They end up hurting low-income people more.”

Dr. Fox also discussed the other side.

“There’s some people who push back about that and say that [there are] upsides of a flat tax, where it’s going to be more popular with taxpayers and it’s going to be easier to manage.”

Dr. Fox said a flat tax is often more popular with higher-income earners who often vote Republican and find it appealing for its simplicity.

He said it can be compared to sales taxes; when an item is purchased, everyone pays the same tax on it.

“If you make under $300,000 a year and you have to go buy a gallon of milk and pay tax on it, that’s a lot less burden on your wealth than it is for someone who makes under $30,000 a year,” Dr. Fox aid.

He said right now, he views any flat tax proposal as messaging more than a concrete policy. There’s also the memory of former Kansas Governor Sam Brownback and his tax experiment.

“I would say that on the Republican and Democratic sides, the legacy of Sam Brownback, both positively and mostly negatively, is very, very real,” Dr. Fox said.

12 News reached out to the Kansas Chamber on its flat tax plans and the fiscal hit of removing $1.5 billion of state revenue starting in 2025.

In a statement, the Chamber said it’s not surprising and adds that it looks forward to working with the legislature on comprehensive tax reform this session, saying it’s needed to make Kansas a more competitive and attractive state in which to live and work.