When the Senate failed to override Gov. Sam Brownback’s veto of a major tax reform bill in late February, a group of conservative legislators who call themselves the Kansas Truth Caucus issued a statement in support of their likeminded colleagues: “We commend those courageous Senators who were willing to stand up and fight for Kansas families who are already struggling to make ends meet.” This is a tactic Brownback and his allies use all the time: they try to make any tax increase sound like an intolerable assault on hard-working Kansans.
However, if the Truth Caucus is actually concerned about struggling Kansas families, it wouldn’t be advocating the implementation of a flat tax in the state.
This is a system that has long been favored by conservative politicians and groups in the U.S., and some lawmakers would like Kansas to become the ninth state in the country to adopt it. One of the proposals under consideration would set the tax rate at 3.9 percent for all Kansans and eliminate a majority of tax breaks. Another would tax everyone at 4.9 percent and slash the sales tax on food. And a third option would establish a 5 percent tax rate for single earners who make more than $10,000 per year and married couples who make more than $20,000.
A flat tax rate is attractive to lawmakers who want to make the tax code as simple and intelligible as possible. But here’s the problem: It would have a disproportionate impact on low-income Kansans while needlessly sacrificing tax revenue from top earners.
Whereas House Bill 2178 – the tax bill that Brownback vetoed in February – would have added a third tax bracket and made the rates more broadly progressive in Kansas, a flat tax would do the opposite. Although there has been talk of exempting the state’s lowest earners from paying income taxes, a flat tax would still impose the same burden on impoverished families, the middle class and top earners.
Some legislators think a flat tax is the only fair system because everyone would pay an equal share of his or her income. Sen. Julia Lynn, R-Olathe, says “Flat is fairer.” A Brownback spokeswoman said the governor would consider a “fairer, flatter, simpler” tax code. This is the language used by national proponents of a flat tax as well – Sen. Ted Cruz called his 2016 tax proposal the “Simple Flat Tax Plan.” Rhetoric like this is appealing to voters who question the immense complexity of the federal tax code, but Kansas only has two tax brackets (and the reinstatement of a third wouldn’t be complicated).
Moreover, the word “fair” is deceptive when it comes to a flat tax. Imagine two Kansas taxpayers – one makes $100,000 per year and the other makes $12,000. While the higher earner will contribute far more money under a flat tax, the person earning $12,000 is the one being asked to make a more significant sacrifice because he or she has less disposable income. Even though the rate is the same for both Kansans, a person making $12,000 may not be able to afford basic necessities like food or medicine. The wealthier taxpayer will have to make adjustments, but he or she has a much larger financial cushion.
Lawmakers are right to call this scheme flatter and simpler, but it certainly isn’t fairer.
Members of The Capital-Journal’s editorial advisory board are Zach Ahrens, Matt Johnson, Ray Beers Jr., Laura Burton, Garry Cushinberry, Mike Hall, Jessica Hosman, Jessica Lucas, Veronica Padilla and John Stauffer.