Thursday, January 17, 2013

Kansas Gov. Proposes Elimination Of Income Tax While Maintaining Tax Hike On The Poor


Kansas Gov. Proposes Elimination Of Income Tax While Maintaining Tax Hike On The Poor


Kansas Gov. Sam Brownback (R) became the latest Republican to propose the elimination of state income taxes during his State of the State address last night, adding that he would make up lost revenue by maintaining what was supposed to be a temporary increase in the state’s sales tax. Republican governors in Louisiana and Nebraska, along with GOP lawmakers in North Carolina, have also proposed replacing their state’s income taxes with increased sales taxes, a regressive plan that will raise taxes on the poor while cutting them for the wealthy.
Brownback proposed an initial cut to the state income tax, which he wants to eventually eliminate altogether, the Kansas City Star reports:
Amid the depths of the recession, legislators approved a 1-cent increase in the state sales tax in 2010. That was to be a temporary boost, with six-tenths of a cent scheduled to go away this summer on the expectation that other revenue would trickle in with an improving economy.
Now Brownback suggests rethinking the sales-tax rollback.
He wants to use it as a lever to further reduce income tax rates, piling on more cuts to those passed by the Legislature last year. Brownback wants to lower the rate in the highest income tax bracket to 3.5 percent from 4.9 percent. The rate for the lowest bracket would drop to 1.9 percent from 3 percent.
In 2012, Brownback signed a massive tax cut for the wealthy into law over the objections of Democrats and even some Republicans. That plan, which initially included provisions that would hammer the poor, would reduce state revenues by $800 million by 2014, according to the Kansas Legislative Research Department, and would likely lead to rollbacks in funding for schools and other vital programs. The plan made Kansas’ already-regressive tax code — the poorest 20 percent pay 9 percent of their income in taxes compared to less than 6 percent for the top 1 percent of earners — even more regressive. This proposal would make it even worse.
Replacing income taxes with sales taxes has become a cause du jour of Republican governors and state legislators, who are being urged to take such action by groups like Grover Norquist’s Americans for Tax Reform and Americans for Prosperity, the anti-tax group founded by the Koch brothers. In Louisiana, Gov. Bobby Jindal’s (R) plan would give the wealthy a tax cut while raising taxes on the bottom 80 percentof residents, while in Nebraska, the plan could mean a tax cut for the rich at the expense of tax breaks that benefit the poor.



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