TOPEKA — A 50-state study of tax systems found Kansas' lowest-income residents pay 1.5 times more in taxes as a percent of income compared with the wealthiest residents, ranking the state 23rd in the nation on an equity index.
The Institute on Taxation and Economic Policy in Washington, D.C., reported the most tax-regressive states were Washington, Texas, Florida, Sound Dakota and Nevada. The most regressive states assessed the bottom 20 percent of earners with up to six times the burden required of the wealthiest families.
California stood out as the most progressive in the analysis of all major state and local taxes, including personal and corporate income taxes, property taxes, sales and other excise taxes.
The institute's new report said Kansas would have ranked 13th in tax inequality, rather than 23rd, had state lawmakers not repealed in 2017 an income tax exemption for more than 300,000 business owners and raised the income tax rate on the top 5 percent of earners. That legislation was adopted despite a veto of the bill by then-Gov. Sam Brownback.
"The new ITEP reports makes clear that Kansas is moving in the right direction with the passage of Senate Bill 30 and the reversal of the debilitating Brownback tax experiment," said Emily Fetsch, director of policy and research at the Kansas Center for Economic Growth.
She said Kansas legislators ought to restore refundable, targeted tax credits for low-income earners.
The institute's study indicated the lowest 20 percent of Kansas earners paid 11.4 percent on state and local taxes as a share of family income. The middle 20 percent paid 10.6 percent, while the upper 1 percent paid 7.4 percent. Those Kansas numbers were based on permanent tax law enacted through Sept. 10 and 2015 income levels.
In the campaign for governor, Republican Kris Kobach said he would renew provisions of the Brownback tax cuts first adopted in 2012. He promised to reduce state spending to reflect revenue decline resulting from tax reform. He said Brownback and the Republican-led Legislature mistakenly avoided meaningful cuts, which contributed to years of budget problems and the 2015 sales tax hike signed by Brownback.
"Kansas is the high-tax state in the five-state region," Kobach said, "and, as governor, I will work to lower income, sales and property taxes."
Independent gubernatorial candidate Greg Orman and others on the Nov. 6 ballot have voiced criticism of Brownback's tax policy.
"Brownback’s most significant mistake was not changing course when all evidence suggested his plan was failing," Orman said.
Democratic candidate Laura Kelly said one of the state's priorities had to be lowering the 6.5 percent statewide sales tax on food — a provision of Kansas law viewed as highly regressive.
"Kansas has one of the highest tax rates on food in the nation," Kelly said. "We can change it."
Authors of the national tax study said states would have difficulty raising sufficient revenue to run government if growing income inequality wasn't addressed.
"State lawmakers have control over how their tax systems are structured," said Meg Wiehe, the institute's deputy director and a study author. "They can and should enact more equitable tax policies that raise adequate revenue in a fair, sustainable way."