TOPEKA, Kan.—A new group wants Kansas to join nine other states that don't have an individual income tax. Supporters claim states like Texas, Tennessee and Florida are growing faster and creating new jobs because they don't have an income tax. A proposal to eliminate the state income tax is getting the attention of many Kansans.
Supporters say it would grow businesses in the Sunflower State and attract a lot of new jobs. Governor Sam Brownback says eliminating the income tax will encourage population growth and attract businesses that bring new jobs.
"The biggest group of folks who pay the highest tax burden in this state are small business owners and those are the folks who create the wealth in this state," said Ashley McMillan. "So, why are we taxing those folks more than others? This is a good way to allow more capital to be spent on hiring people and increasing jobs."
McMillan leads the group Kansans for No Income Tax. She believes Kansas can replace income tax revenue through growth by closing loopholes in tax code that favor special interests. She says the state shouldn't have to hike property taxes or sales taxes to compensate. Democrats aren't buying it.
"My worry would be that if you eliminate the income tax altogether, keep in mind that is $2.7 billion out of $6 billion state general fund state budget," said Rep. Paul Davis. "If you look at all services state government provides you're talking about lopping off over 40 percent. That's a big, big number."
The Institute on Taxation and Economic Policy, a non-partisan think tank, says if Kansas raises sales taxes to cover a quarter of the lost revenue from an income tax repeal, the poorest 40 percent of Kansans will pay more in state taxes.
Kansas may not be the only state considering phasing out its income tax. Supporters of the movement say a similar measure is expected to be on a referendum in Missouri.