The Kansas Senate Ways and Means committee passed a $434 million tax package on Friday. House Bill 2360 which carries these tax increases was passed 8-4. Senators Apple, Masterson, Taddiken, and Schodorf voted against this burdensome package, while Senators Emler, McGinn, Vratil, Schmidt, Teichman, Umbarger, Kelly, Kultala, and Lee voted for it. A Senate Floor vote is expected as early as today on this package and the Senate budget (HB 2361). The tax increases included in the package are:
-an increase in the sales tax that would cost the taxpayers $365 million in FY2011 alone;
-the elimination of the IRS Section 199 deduction through the decoupling of Kansas tax law from that of federal tax law, a tax increase of $17 million;
-a 70% tax increase in the cigarette tax raising the rate to $1.34 a pack, a tax increase of $49.4 million;
-and a 300% tax increase in the tax rate on wholesale tobacco products taking the rate to 40%, a tax increase of $13.7 million.
Over 5 years this tax package is expected to cost Kansans $1.77 billion, money that would be better served in the private sector rather than being used as spending money for the government.
Additionally, the Senate will soon be voting on their budget (HB2361) which is currently out of balance by $418 million. This budget should be voted against due to its dependence on more revenue which would be delivered by saddling the taxpayers with $434 million in new taxes. For this reason, the Senate should vote against both the budget and the tax increase package that would be used to fund it.
To see ATR's letter opposing both the budget and the $434 million tax increase package, click here.