TOPEKA, Kan. (AP) – Most Republicans on Tuesday scaled back their ambitions to cut income taxes in Kansas and tabled a tighter proposal through the GOP-controlled legislature in hopes of overcoming opposition from the Laura Kelly Democratic administration to the revenue cut .
The House voted 81-43 to approve a bill that would save taxpayers $ 284 million in three years. Major GOP lawmakers began to provide relief to businesses and individuals whose state income taxes rose due to changes in federal income tax laws in late 2017. The measure also includes a small increase in the standard deduction for each individual applicant.
The Senate approved the measure hours later, 30-10, and sent it to Kelly. Most GOP senators last month showed a greater appetite for tax cuts by passing a package that would have cost the state $ 1.3 billion over three years and well beyond Republican leaders’ stated goal of the unexpected “godsend” to return state revenue in connection with federal tax changes.
However, that earlier move also brought back memories of a notorious experiment to cut taxes in 2012 and 2013 under GOP Governor Sam Brownback. These tax cuts were followed by major and persistent budget constraints until lawmakers reversed most of them in 2017.
Senate Tax Committee Chairwoman Caryn Tyson, a Parker Republican, said she supported much of the larger plan and parts of it made GOP Senators “feel good,” but, “It’s another thing to put this into law. We need it legally. “
“All or nothing? Sometimes you have nothing,” she told her colleagues on Tuesday evening before their vote. “I’d rather get pieces and have real reforms and get the money to the taxpayers where it belongs.”
Kelly vetoed two GOP tax cut plans in 2019 after winning the governor’s office the previous year, largely by running against Brownback’s legacy. She said earlier this month when Kansas is still “digging up” from the experiment and should not cut taxes as it is recovering from the coronavirus pandemic.
Some Republicans had hoped to pass a plan by the two-thirds majority required in both chambers to override a Kelly veto. The bill’s supporters had three more votes than necessary in the Senate – including yes votes from two of the eleven Democrats. But they had three votes less than the required super-majority in the house and had no democratic support there.
The governor has been open to an increase in the standard income tax deduction but has proposed offsetting the cost of this policy by introducing a 6.5% state sales tax on online music and films and digital streaming services. This idea is a no-starter for Republicans who ridiculed it as a “Netflix tax”.
The federal tax changes in 2017 were endorsed by former President Donald Trump and discouraged people from demanding individual deductions on their federal returns. Kansas law doesn’t allow people to itemize their state returns if they don’t do so on their federal returns, which leads to higher state tax burdens for some. The bill, approved on Tuesday, would allow people to break down their government returns, even if they fail to do so on their federal statements.
Democrats have attacked GOP tax proposals to provide relief to large corporations. House minority chairman Tom Sawyer, a Wichita Democrat, turned down the narrower plan, which was approved Tuesday as a corporate giveaway.
“It’s too rich,” said Senator Tom Holland, a Baldwin City Democrat, who voted no. “There’s still a lot of Wall Street in there. It takes more Main Street. “
The larger Senate Republican plan was far more aggressive in increasing standard income tax deductions and would include provisions to exempt social security and other retirement income from taxes.
Eric Stafford, a Kansas Chamber of Commerce lobbyist who has sway over GOP lawmakers, said the measure focuses its relief for businesses on companies paying more to the state due to changes in federal tax law.
“The fact that they are increasing the standard deduction is drawing some support, and obviously getting 30 votes in the Senate is quite a big statement,” Stafford said.
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