Flat Tax Is Flat Wrong for Kansas

Emily Fetsch | March 6, 2023

When comparing Kansas to our neighboring states and the nation, Kansas has a greater dependency on property and sales taxes, while relying less on personal income taxes.

The Kansas income tax structure is the most progressive of the three-legged stool (income, property, and sales) meaning people pay higher rates on higher incomes. Sales taxes, however, are the most regressive type of taxes, as low- and moderate-income households spend a higher percentage of their income on these taxes.

Currently, the progressive income tax structure attempts to balance other tax benefits for the highest-income Kansans. But even with the current graduated income tax structure, the total effective tax rate for the highest-income Kansans is still substantially lower than for other income groups. According to the Institute on Taxation and Economic Policy:

• While Kansans in the lowest 20 percent income range have an effective total tax rate (combining income, property, and sales taxes) of 10.7 percent, the top 1 percent has an effective tax rate of just 7.4 percent.
• A graduated income tax structure works to offset the regressive nature of sales and property taxes. For example, the lowest 20 percent of Kansans by income spend 7 percent of their household earnings on sales taxes compared to just 1 percent for the top 1 percent income range.
• Similarly, the lowest income Kansans have more than twice the effective property
  tax rate (4.1 percent) than the top 1 percent (1.8 percent).

Proposals to “flatten” the income tax structure would make the effective tax rate for higher-income Kansans even lower. In addition, the amount of the tax cut received by the highest-income tax filers would most likely be substantially more than the tax cut received by the lowest-income filers.

Flat tax proposals would worsen tax equity and drain state revenue, while child care, health care, and special education continue to remain underfunded. Kansas should retain, and improve upon, its graduated income tax structure to ensure every Kansan pays their fair share and contributes to the common good.

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