For use week of Feb. 10, 2020
By Martin Hawver
While the folks who run the Legislature are figuring out what to do about that abortion resolution, plus the expansion of Medicaid to about 130,000 Kansans, we’re thinking about…taxes.
There’s money available for some tax cuts this year, income taxes are always a good place to start and the House Tax Committee is looking at income tax cuts this week and who gets them.
Now, nobody doesn’t want their individual income taxes reduced. But whose taxes do you cut? And will those tax cuts get you enough votes to get re-elected to the House or Senate, because both chambers are up for re-election this year?
Do you cut taxes for the wealthier voters, who will be driving Buicks or better to the voting booth, or for the folks who drive to the voting place and wonder in the back of their minds whether their cars will start when they’re done?
One plan sounds good for the folks who send their shirts to the laundry for washing: De-couple individual income taxes from the December 2017 President Donald Trump tax cuts.
Remember that federal tax cut that Trump is still bragging about? It raised the federal standard deduction to $12,000 for singles and $24,700 for married couples filing jointly. That was nice, of course, but it triggered a state law which says if you take the federal standard deduction, you take the state standard deductions. That’s “coupling.”
So, if you are single, and have more than $12,000 in federal deductions, you take them, of course. But if you don’t beat that federal $12,000 floor, you are stuck with the state’s $3,000 standard deduction for singles, and $7,500 for marrieds filing jointly. That means Kansans filing as married/joint don’t get to take advantage of deductions of more than $7,500.
So, about 63,000 Kansans have itemized deductions worth about $61 million that…well, they can’t use. There’s a voting bloc that is probably important in some House and Senate districts.
Another way to go was proposed by Rep. Jim Gartner, D-Topeka, to boost the Kansas standard deduction from $3,000 to $4,000 for singles and $7,500 to $8,000 for those married/joint filers. It costs about $50 million in lost state revenue and would deliver a tax cut to about 1.2 million Kansans. Generally those not as well-heeled as the decoupling beneficiaries, but voters, nonetheless.
Which way to go? Depends on whom you are hoping to impress.
Of course, those 1.2 million Kansans who benefit from the Gartner proposal includes the 63,000 who benefit from decoupling, but probably not by enough to choose leather upholstery for that Buick. But for more than 1.1 million Kansans, it’s something, a little less cash they have to send to Topeka…
There’s enough money in the state treasury to do both plans, but it tightens the state budget and probably will mean less money for Democrat Gov. Laura Kelly to use for her 2022 re-election campaign. Not sure Republicans are going to enjoy that. They’ve already said that vetoing a decoupling last session essentially raised income taxes due to the flow-through of federal tax law on individual income tax filers.
Lots of other issues, broader issues that are currently tying up the Legislature. Abortion, Medicaid expansion, probably school finance at some point, and things like social services, highways and such.
But there’s nothing like taxes to get the attention of every voter, and there’s nothing like tax cuts to distract Kansans from nearly every other issue, is there?
How’s this come out? Too early to tell…
Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver's Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com