Flat Tax proposals fall flat in House Tax committee

As the House Taxation committee works through the final concept proposals for changes to the State of Kansas revenue stream, Monday was a day to explore two different proposals for a “Flat Tax”.

The committee held hearings on two bills, HB 2385 — Providing for a 3.9 percent tax rate for all individuals and repealing future formulaic rate cuts, and HB 2395 — Providing for a 5 percent rate on all income over $10,000 for individuals and $20,000 for persons married filing joint returns.

Beginning the hearings with HB 2385, it was clear that there wasn’t much interest or support for the discussion this year, with only four organizations providing any testimony.

In opposition, Kansas Center for Economic Growth Executive Director Heidi Holliday highlighted the negative impact the legislation would have on low income earners who would see at 50 percent tax increase under the first proposal.

The Kansas Chamber of Commerce and Kansas Policy Institute were both neutral on the bill with supportive comments on the overall concept but concerns on the structure as presented.

With very few questions or comments from the members of the committee, the hearings progressed to HB 2395 which saw even more limited discussion and support, with the only opponent actually wanting to change to a proponent once they saw the fiscal note which indicated the bill would decrease income tax revenue by $82 million in FY18 and $64 Million in FY 19.

House Tax will continue discussions on various revenue topics today as they hold a hearing on HB 2384 – Imposing Sales Tax on Certain Services, which would remove the sales tax exemption of youth recreational league registration fees.

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