Gov. Kelly should veto tax cut for wealthy



May 7, 2019 - 10:21 AM

The Kansas Legislature’s unrestrained enthusiasm for cutting corporate taxes resurfaced in the closing days of the 2019 session. Lawmakers passed a bill that would, among other things, lighten the tax load for businesses by about $120 million during the next three years.

Gov. Laura Kelly has an easy decision. She should veto the bill and tell lawmakers to try again.

The corporate giveaway is part of a slimmed-down tax cut that replaced the tax bill Kelly vetoed earlier in the session. That measure, Kelly said, would have crippled a state budget still recovering from former Gov. Sam Brownback’s trickle-down disaster.

This new plan, cobbled together by negotiators last week, does less damage than the original legislation. It would cost the budget about $240 million over three years, roughly half the cost of the first bill.

But it would still cut corporate taxes, which is utterly unnecessary in Kansas. Corporations received a massive windfall from the federal business tax reductions signed by President Donald Trump. The president and his allies insist those tax cuts are responsible for a booming economy.

Why, then, must Kansas hand big business another $120 million check?

The bill also includes potential tax cuts for Kansans who want to itemize their tax returns. That part would help wealthier Kansans, but would do little for poorer residents who have few deductions to claim.

Lawmakers could have helped working-class Kansans by cutting the state’s sales tax on food, which is among the highest in America. While the legislation includes a modest reduction in the food sales tax, it’s based on sales tax revenue from out-of-state retailers meeting certain targets.

Legislative analysts said Kansans would probably have to wait until 2021 before seeing any relief at the checkout line. Sadly, the interests of parents who struggle to put food on the table are less important to legislators than pumping up the balance sheets of multinational corporations.

The tax system in Kansas is already skewed to the wealthy — it relies far too much on a regressive sales tax and a top income tax rate that starts at $30,000 for an individual. The bill now on the governor’s desk only makes it worse.

Kelly has suggested convening a state tax commission to look at how Kansas raises money and how to make taxes more fair. It’s a great idea.

“What kind of revenue stream is needed to provide services like health care, public education and public safety, both now and into the future?” Kelly asks. “What parts of our tax code are antiquated or unfair?”

Such a study is long overdue. A top-to-bottom review should show how the state can raise the money for the things it needs while protecting the poorest residents from excessive tax bills.

A $120 million tax giveaway to corporations is a horrible way to start that discussion. Veto the tax bill, governor. Then all of us can figure out how to make the state’s tax structure as fair as it should be.