(Will be updated as warranted)
The House unveiled its proposed tax plan late Monday afternoon that calls for moving the state to lower dual income tax rates that would be coupled with a property tax cut.
Republican state Rep. Adam Smith of Weskan introduced the bill in the tax committee that he chairs.
The bill represents the House response to a bill with a single tax rate that was passed by the Senate last week.
The House bill is expected to be on a fast track with a hearing on the bill scheduled for Wednesday. It could reach the House floor by early next week.
Smith said the votes aren’t there to override Gov. Laura Kelly’s veto of a flat tax, something she’s already done twice.
“Time’s running out, and we need to put a different proposal in front of the Legislature,” Smith said.
The House tax chair said he believes there would be more tax savings for the middle class in the latest tax plan than previous iterations.
Smith said moving to the dual rate alone would save taxpayers a minimum of $50 for single filers and $100 for married couples.
The new House bill would collapse the state’s three-rate structure to two rates, the top two of which are currently at 5.7% and 5.25% It would eliminate the bottom rate of 3.1%.
Smith’s plan would cut the top personal individual income tax to 5.65% and the smaller bracket to 5.2%.
The first $7,000 for a single filer’s tax rate would not be taxed. The first $14,000 for a married couple filing jointly also would not be taxed.
The plan would also increase the standard deduction across the board:
- Raising to $3,605 from $3,500 for single filers
- Raising to $6,180 from $6,000 for head of household
- And increasing to $8,240 from $8,000 for married couples filing jointly.
The new House plan would phase out state income taxes on Social Security over four years.
It also would increase the personal income tax exemption to $2,320 from $2,250.
The bill also would lower the state’s 20-mill tax property tax levy for schools to 18 mills while repealing the local ad valorem tax reduction fund.
The money for schools would be replenished from the state general fund.
The so-called LAVTR fund has been used in the past to send money to local governments to lower property taxes. The Legislature hasn’t put any money into the fund in 20 years.
The bill also would increase the property tax exemption for the school tax to $80,000 from about $42,000. The exemption would increase based on inflation.
The bill does not do anything to accelerate the elimination of the state sales tax on food.
There is no fiscal analysis yet for the tax plan that Smith introduced.
The House plan, which had been anticipated for days, comes less than a week after the Senate passed a single tax structure with a supermajority.
The Senate passed a tax plan late last Thursday night that would cost nearly $1.8 billion over three years. It was an amount that even some Republican senators conceded might be too much.
The Senate bill collapses the state’s three tax rates down to one, which would gradually decrease a half percent a year from 5.7% in 2024 to 5.45% in 2029.
It also would increase the personal exemption to $22,000 for a married couple filing jointly from $2,250 for a single person.
The exemption would rise to $11,000 for all other filers. Additionally, filers could claim a $3,000 personal exemption for each dependent.
The bill also would exempt all Social Security income from state taxes and increase the property tax exemption for the 20-mill school tax to $100,000 from about $42,000.
It also would increase the standard deduction for individuals to $4,000 from $3,500 with everyone getting a yearly cost-of-living adjustment starting in 2025.
