The Kansas House will consider a flat tax. The proposal increases taxes across the board to 5 percent.
Currently, single Kansans are taxed 2.7 percent on their first $15,000 of taxable income and $405 plus 4.6 percent on income they earn above $15,001. The bottom rate is set to drop to 2.6 percent in 2018.
A divided House committee forwarded the legislation, 14-7, on Wednesday. Democrats and Republicans voted on both sides of the proposition. If adopted, the proposal adds $850 million in state revenues over the next two years.
The bill reintroduces a mortgage deduction, lowers sales tax on food, and rolls back an LLC tax incentive. However, Democratic Rep. Tom Sawyer, Wichita, said the tax hike disproportionately hits lower income Kansans.
“You’re getting all the money on the lower end,” he said.
The tax package is a second one to reach the House floor this session. The first also rolled back the LLC tax exemption and increased taxes. It added a third tax, higher tax bracket and increased state revenues by $600 million. However, Gov. Sam Brownback vetoed that plan. The House voted to override his veto. The Senate fell a few votes shy, and lawmakers returned to the drawing board.
Lawmakers seemed to have a sense of urgency to get a tax package to the floor. Rep. Dan Hawkins said there’s something to dislike in every tax bill.
“We have to get something to the floor,” Hawkins told the committee.
Legislators face a shortfall of close to $1 billion in the next two years–assuming no new spending. However, the Senate gave approved a budget that adds $545 million in new spending in 2018 and 2019. That budget doesn’t include anticipated increases in school funding.