In Kansas, wealthier individuals are paying much less income tax, while the working class might have to pay more in sales tax for basic necessities.
Due to an overhaul of the state’s tax system by Republican Governor Sam Brownback, Kansas is projected to collect $187 million less in taxes through June 2016 than anticipated. Before the overhaul, the state’s budget proposal required a $150 million increase in taxes every year, but in November 2014 tax collection was reduced by $88 million. Brownback hoped that a decrease in taxes would increase revenue and stimulate the economy, making up the difference. However, there has not been an increase in revenue as a result of the modified tax system given that Kansas’s economy has only grown consistent with the rest of the nation.
In an effort to fill the budget shortfall, lawmakers are proposing to increase sales and excise taxes. These taxes will ultimately have the greatest effect on the working class and further add to economic inequality. According to a recent report by the Institute for Taxation and Economic Policy, the average working class Kansan pays 11.1% of their income in taxes, while the wealthiest in Kansas pay 3.6% of their income in taxes.
According to the proposal, sales tax would increase from 6.15% to 6.3%. The reasoning behind this proposal is that an increase in sales tax would encourage people to save more and invest their money. As an article in the Washington Post explains, the less a person earns, the greater the percentage of their income is spent to meet basic necessities. While the wealthy have the option of reducing their spending by cutting back on luxury items, low-income individuals do not have the capacity to choose how to spend their money and will continue to spend all or a majority of their income towards basic necessities. And now they will get taxed more for meeting those needs.
Making it even harder for low-income Kansans, Governor Brownback signed a bill, HB 2258, limiting the use of public assistance benefits. Kansans who receive assistance through the Temporary Assistance for Needy Families (TANF) program will be banned from using the funds to go swimming or to watch a movie. The bill also limits the amount a TANF recipient can withdraw from the ATM to $25 a day. Representative Carolyn Bridges, a Wichita Democrat, stated during the House debate, “I just think we are simply saying to people, ‘If you are asking for assistance in this state, you’re sort of less than other people and we’re going to tell you how and where to spend your money.'”
For more information, see this article in the Washington Post.