TOPEKA (KSNT)- The Kansas Chamber announced it has introduced a single-rate tax bill, which is ‘similar to a flat tax,’ according to agency leaders.
A flat tax refers to a single tax rate being applied to every taxpayer regardless of income, which typically does not involve deductions or exemptions. However, according to Chamber President and CEO Alan Cobb, the proposed flat tax legislation would keep existing deductions in place.
“Similar to a flat tax, a single-rate tax rate will simplify our state’s tax code and will make it easier for taxpayers and state leaders to know what is expected. But it doesn’t eliminate existing deductions,” Cobb said.
Kansas currently has a three-tiered rate system of 3%, 5.25% and 5.7% on personal income. According to The Chamber, businesses pay 4% on the first $50,000 and another 3% surcharge on the rest, effectively 7%, in corporate income taxes.
Cobb said the bills introduced, Senate Bill 61 and House Bill 2061, would lower personal and corporate income taxes to 5% and exempt the first $15,000 for all taxpayers to avoid a tax increase on lower income Kansans and businesses.
The Chamber believes that the legislation would take steps to modernize the state’s tax code and lower the tax burden for all Kansas taxpayers.
“The state’s record-breaking tax revenue collected the last few years gives lawmakers the opportunity to build on recent updates and strategically modernize the state’s tax code,” Cobb said. “As demonstrated by the success of numerous other states, the Chamber believes a single-rate tax that exempt the first $15,000 of income will move Kansas from the bottom half of region and make the state more competitive and attractive to investment and workforce.”
According to The Chamber, the bills also include language based on North Carolina’s growth trigger that states any revenues more than what is estimated to be received by the Kansas Consensus Revenue Estimating Group would be split to further buy down income taxes on both personal and corporate income.
Using a portion of the recent significant budget surplus for overall rate reductions is part of the Chamber’s 2023 Legislative and Policy Agenda.