The Path Forward
The Brownback tax experiment not only broke the Kansas budget, but it also broke the state’s tax code. Fortunately, lawmakers began the path forward in 2017.
Here’s what the Brownback tax plan did in 2012:
- Set Kansas on a “March to Zero,” phasing out all individual income taxes over time while damaging Kansas’ ability to make needed investments in the future.
- Eliminated the top income tax bracket of 6.45%, cumulatively giving the top 1% of earners an average tax cut of $25,000 while raising taxes on the bottom 40% of earners.
- Eliminated income taxes altogether for 330,000 businesses like LLCs, S corporations, partnerships, farms, and sole proprietorships.
- Eliminated or reduced essential tax credits and exemptions for Kansas families, like the home mortgage interest deduction and the child and dependent care credit.
- Resulted in a $308 million tax hike in 2013 and a $430 million tax hike in 2015. Despite this additional revenue (and nine rounds of spending cuts), there is still a $700 million gap between state revenues and expenditures in 2016.
Here’s how lawmakers began to fix it in 2017:
- Ended the “March to Zero,” preventing the future phase out of individual income tax rates and repairing Kansas’ ability to invest in schools, roads, public safety, and strong communities.
- Closed the “LLC Loophole,” ensuring the state’s 330,000 LLCs, S corporations, partnerships, farms, and sole proprietorships pay the same income tax rates as all other Kansans.
- Reinstated a top income tax bracket. By restoring a top income tax bracket and adjusting the income tax rates, Senate Bill 30 is a major step forward in re-stabilizing Kansas’ revenue stream.
- Phased in the restoration of the Child and Dependent Care Credit that was eliminated in 2012 to pay for tax breaks for top income earners and businesses. This important credit will be restored over the next three years.
- Restored other important deductions through 2020, including the medical deduction which helps Kansans struggling with major health problems or unexpected medical expenses, as well as the mortgage interest and property tax deductions to help off-set the cost of homeownership.