The current property taxes proposal being considered in Kansas has generated a significant amount of debate, with both Democrats and Republicans expressing their opinions on the matter. However, it is essential to recognize the potential benefits and drawbacks of this proposal before making a final decision. On the one hand, the flat tax system proposed in the bill could simplify the tax code and reduce the administrative burden for taxpayers. With a single rate for all income levels, taxpayers would have a clearer understanding of their tax liability and could plan accordingly. Moreover, the tax cuts for corporations and financial institutions could spur economic growth and job creation, benefiting the state as a whole.
The proposal’s critics also arrived to the field. Several people have raised concerns about the potential impact on lower-income earners. By implementing a single tax rate, the wealthiest Kansans would see a significant reduction in their tax liability, while lower-income earners would not experience the same level of relief. Moreover, some have argued that the reduction in property taxes and income taxes revenue could lead to cuts in essential public services, such as education and healthcare.
The Real Estate Property Taxes and Income Taxes to Be Modified in Kansas – How Will That Impact You?
The proposal is intended to replace the existing tiered system with a flat tax plan. If passed, the plan would implement a single tax rate of 5.25% for all individuals earning above a certain threshold, starting in tax year 2024. Under the House Substitute for Senate Bill 169, single filers making more than $6,150 and married individuals filing jointly making more than $12,300 would be subject to the 5.25% income tax rate. Additionally, the plan would reduce taxes for corporations and financial institutions starting in tax year 2024, reducing the corporation tax rate to 3%.
While some lawmakers have expressed reservations about the flat tax proposal, compromises have been made to address concerns and garner support. For example, an amendment was added to the bill that would provide tax relief to homeowners. Under the amendment, residential properties valued up to $80,000 would be exempt from a statewide property tax beginning in tax year 2023.
Changing Kansas’ Tax System From Its Core
The bill includes several other measures aimed at improving the state’s tax system. The plan would eliminate the state sales tax on food this year, rather than phasing it out by 2025. The bill would also expand the income tax exemption for Social Security benefits and increase the exemption of residential property from the statewide mill school finance levy.
Finally, the bill proposes to allocate 18% of sales tax revenue to the State Highway Fund beginning in July, instead of the currently planned increase set for January 2025.