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Kansas lawmakers passed a tax plan that proposes a 5.15% flat income tax rate for nearly all Kansans, but Democrats and some economists argue it benefits the wealthiest Kansans and poses a threat to public services. Gov. Laura Kelly is considering a veto based on the report by KCUR News.
The plan to implement a flat income tax rate, which could result in a reduction of $330 million in state revenue, may face veto from Democratic Governor Laura Kelly.
Concerns Over Loss of State Revenue and Burden on Low-Income Earners
The proposed flat tax plan has sparked concerns over the loss of state revenue due to budget constraints due to the COVID-19 pandemic. Critics argue that the reduction in state revenue could lead to cuts in important public services and create incentives for high-income earners to move out of state.
Opponents of the flat tax plan argue that it would disproportionately affect low-income earners, as all Kansans would pay the same percentage of their income in state taxes, regardless of income level. This could lead to increased income inequality and financial hardship for those who can least afford it.
The flat tax plan proposed by Kansas lawmakers was intended to simplify the state’s tax system and spur economic growth, but concerns over the loss of revenue and burden on low-income earners have raised opposition. The debate over the plan’s potential impact is likely to continue.
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Arguments for Flat Income Tax Rate and Potential Benefits
Dave Trabert, CEO of the Kansas Policy Institute, testified that a single rate is the fairest way to tax income, with a faster elimination of sales food tax and a reduction of Social Security taxes for people earning between $75,000 and $100,000.
Republican lawmakers argue that a flat income tax rate could help the state’s economy, but Gov. Laura Kelly is skeptical and may veto the bill, setting up another veto override fight in the Legislature according to KAKE report.
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