The Kansas Experiment is not an Experiment

Are You Better Off Today . . . ?

Has the Kansas Experiment benefited you? Are you better off today than you were before the experiment began in January 2013 when the tax changes went into effect? The answer to this question is, “It depends.”

Friends at the Kansas Center for Economic Growth (realprosperityks.com) report that data collected by the Bureau of Economic Analysis shows that between January 2010 and December 2012 personal income in Kansas ranked 13^th among the 50 states. Since the experiment began in January 2013, Kansans’ personal income fell to 32^nd place—a drop of 19 states. But that’s not the whole story.

Kelly Davis, the Midwest Regional Director of the Institute for Tax and Economic Policy (ITEP) writes in her July 14, 2015, TaxJusticeBlog that the experiment was really a “tax shift.” The experiment created winners and losers by design. I suggest that this tax shift was one of the purposes of the so-called Kansas Experiment.

ITEP analysis shows that the poorest Kansans, those with an average annual income of just over $13,000, will pay on average $197 more in taxes in 2015. At the other end of the scale, the richest one-percent of Kansans, people earning over $439,000 annually, will pay about $24,000 less in taxes in 2015.

Taking a closer look at these two ends of the spectrum. People with an annual income of less than $20,000 will pay 11.1% of their income in state and local taxes. The top one-percent, people with an annual income of $439,000 or more, will pay 3.6% of their income in state and local taxes.

Looking at the Kansas Experiment in another way. ITEP says that Kansans making less than $20,000 pay 3 times more state and local income taxes as a percentage of their income as the wealthiest one-percent.

The Kansas Experiment is not an experiment at all. It is a tax shift that shifts money away from the working poor and gives it to the most affluent members of our state. But that’s not the whole story.

The 2015 federal poverty guideline for a family of 2 is $15,930. For a family of three the figure is $20,090. For a family of four the federal poverty guideline is $24,250. But that is not the whole story.

The website “localtrends.com” helps us break down the income and unemployment figures in Wichita by zip code. Accordingly, the median income in the top four zip codes (67230, 67235, 67205, 67228) ranges from $118,000 to $93,000. The median income in the three poorest zip codes (67202, 67214, 67352) ranges from $26,726 to $20,994). The highest unemployment in Wichita is in zip codes 67214, 67203, and 67202. Localtrends reports that in these three zip codes the unemployment is 8.64 percent. More research needs to done and reported.

Based on the above sketch, we can see that the Kansas Experiment is being conducted at the expense of the most financially vulnerable, and at the expense of our neighbors living in what I will call “targeted zip codes.” The people living in these zip codes are paying the greatest price for the Kansas Economic Experiment (note: my report does not include rural communities).

Are you better off? I guess it depends on your zip code, which has become our “polite” and less personal way of talking about race, poverty and unemployment.

Rev. David Hansen