21 January 2021 | Tax and budget

RELEASE: Lawmakers should halt plans to change tax system, sap revenue

National report shows how cuts would hamper COVID recovery and worsen racial and economic inequities

FOR IMMEDIATE RELEASE
Jan. 21, 2021

TOPEKA, Kansas – Lawmakers proposing changes to the Kansas tax system should reconsider, given the damage that such changes could have on our economy and communities. As states across the nation begin their 2021 legislative sessions, multiple proposals are being considered that would sap revenues needed for an effective response to the COVID-19 pandemic and threaten states’ recovery from the recession, according to a new brief released last week by the Center on Budget and Policy Priorities.

By weakening Kansas finances, the changes included in Senate Bill 22 would undermine efforts to advance racial justice — just when growing understanding of the nation’s shameful history of racism, as well as white supremacist opposition to American democracy itself, demand the opposite approach. State policymakers can – and should – take a better approach to build back an economy that works for all residents. For starters, they should protect existing revenues (and raise new ones) to fund proactive, antiracist public investments in schools, health care, and economic supports that knock down barriers to opportunity and build thriving, more equitable economies.

Lawmakers thinking about reducing tax revenue should consider the following, laid out in the center's brief. Such changes:

  • Would likely worsen racial inequities
  • Haven’t boosted state economies in the past
  • Don’t promote small businesses or jobs
  • Hinder investments to create thriving, more equitable economies

“Tax changes that slash revenue, as lawmakers in the Legislature have proposed, are an unproven approach that would be damaging to Kansas communities at the best of economic times,” said Emily Fetsch, Director of Fiscal Policy at Kansas Action for Children. “Yet here we are, debating doing so during a deadly global pandemic, rampant hardship, and an uncertain economic future. Lawmakers need to do the responsible thing in 2021 and back away from these dangerous proposals.”

SB 22 is a compilation of bad tax ideas that includes giving tax breaks to giant multinational corporations and changing itemization rules for individuals, mainly benefiting high-earning Kansans. It isn’t revenue neutral either, with a price tag of $329 million in lost revenue for the first year alone.

In the middle of a pandemic that has harmed small businesses and low-income Kansans the most, legislators should spend their time on bills that would help such Kansans, not the most economically fortunate among us. Proposals that could reduce wealth inequality, such as a fourth tax bracket for the highest-earning Kansans, would set our state up for success in the years to come.