To the editor:
Robust, civil debate of ideas is healthy and welcome. Unfortunately, John Sturn’s persistent personal attacks on these pages over the last few months in response to my support of a flat income tax serve no public good, so this is my final attempt to set the record straight.
First of all, the data I’ve shared is accurate, including but not limited to:
• Tax relief provided in neighboring states will leave Kansas with the highest marginal income tax rate at 5.7%. Missouri is 5.3%, Oklahoma is 4.75%, Colorado is 4.4%, and Nebraska will eventually be at 3.9%.
• The proposed flat tax of 5.15% will reduce taxes for everyone, and after four years, Kansas would still have a $4.5 billion surplus.
• Kansas is in its fifth straight decade of economic stagnation, trailing the national average in private-sector job growth and economic activity.
• Kansas has the worst record among neighboring states on domestic migration, with a net loss of about 197,000 U.S. residents moving in and out of the state over the last 23 years. Nebraska has a much smaller loss (in raw numbers and percent of population), while Missouri, Oklahoma, and Colorado have net gains.
• As a group, states with lower tax burdens have superior economic growth.
• People who earn more would get a larger tax reduction with the proposed flat tax because they pay the vast majority of income tax. Kansas Department of Revenue data says Kansas residents with adjusted gross income (AGI) above $100,000 had 61% of total AGI but paid 70% of the income tax, while those with AGI below $50,000 had 17% of total AGI but paid only 9% of total state income tax.
• A family of four with a $40,000 income would have its tax bill reduced by 23%, whereas the same family with a $200,000 income would only get an 8% reduction.
I should have said opposition to a flat tax is driven by a desire to minimize relief to those who earn more and pay the most state income tax rather than to deny them tax relief. Sturn is right about that, but his claims that pertinent data was omitted are unfounded.
For example, we don’t have an estimate of the economic impact of reducing each rate in the current 3-bracket system, but our economists say Sturn’s suggested reductions would produce less than the proposed flat tax because his highest rate of 5.65% is relatively unchanged and still very high.
Sturn’s proposal to modify the 3-bracket system shifts more of the income tax burden to those who already pay 70% of state income tax, and it will produce less economic benefit to the state. Those who believe that to be the better policy should civilly explain why it is a good trade-off; this isn’t a matter of right or wrong, but perspective. Deceptive claims and unfounded rude accusations serve no one.
CEO of Kansas Policy Institute