To the editor:
Kansas has a budget surplus and taxes should be reduced, but not with the proposed flat tax. The flat tax routes large tax reductions to those of us with the most money. The Brownback income tax cuts showed that this is no guarantee of job creation or tax revenue growth. The flat tax minimizes the benefit to middle-income earners.
In his Oct. 21, Great Bend Tribune public forum letter, Kansas Policy Institute CEO, Dave Trabert showed the savings of the proposed flat tax compared to our current tax rates. The tax paid by a family with income of $40,000 was reduced by $162. The tax paid by a family with income of $200,000 was reduced by $725. The high-income family saved 4.5 times as much as the low-income family.
The same approximate total tax reduction can be made by simply lowering the rates of our current three bracket income tax from 5.70%, 5.25% and 3.10% to 5.65%, 4.70% and 1.85%. But in this case, the tax reduction is $288 for the low-income family and $602 for the high-income family. The high-income family still saves more, but the savings is reduced to 2.0 times as much as the low-income family.
A case not shown in Trabert’s comparison is a middle-income family with an income of $80,000. Their tax reduction with the flat tax would only be $65, which is much less than either the low- or high-income families. The reduction for this middle-income family with the above lower rates in our current three bracket income tax would be $542.
We can also reduce taxes with our current three bracket income tax by raising the brackets. The family income levels for the three brackets are: below $30,000, $30,001 to $60,000, and above $60,000. These values have not changed since 1992. Raising the dividing levels of $30,00 and $60,000 to say, $40,000 and $70,000, would reduce taxes for all middle and upper bracket payers. Indexing the brackets (annual increases based on inflation) would duplicate what is done with federal brackets.
The examples above show how our current three-bracket income tax can be used to route more of the benefit of a tax reduction to middle- and low-income earners. But we can also use it to do just the opposite. We can change rates and brackets and route the benefit to high-income earners if we want. The flexibility of a bracket income tax is probably one of the main reasons we have used it here in the U.S. for over 100 years. The inflexibility of a flat tax pretty much forces it to benefit the wealthy.
Trabert wrote that he was helping readers make their own educated decisions about tax issues. His help was to omit how little the flat tax would benefit middle-income earners and that by design it would benefit the wealthy. It is hard to see how a reader who was unaware of these shortcomings of the flat tax would be very well educated. But it is easy to see how the reader would be more likely to make the decision that Trabert wants and not oppose the flat tax. Please do not buy into the KPI’s propaganda or promotion of the proposed flat tax.
By keeping our current three-bracket income tax and prioritizing property-tax relief and sales tax reduction, we can put the same value of tax reduction back into our private job market as a flat tax, but route more of the benefit to Kansans with middle and lower incomes. And Kansans with the highest income can still receive the largest tax reduction.
John Sturn
Ellinwood
