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Kansas Gov. Laura Kelly proposes axing the state’s food sales tax, but can it be fair to all?

November 12, 2021

4 Min Read
Kansas Gov. Laura Kelly checks out at a grocery store after having gone shopping with Wichita-area mom Jennifer Melcher and h
AXE THE TAX: Kansas Gov. Laura Kelly checks out at a grocery store after having gone shopping with Wichita-area mom Jennifer Melcher and her daughter Millie to discuss the proposed plan to “Axe the Food Tax.” By cutting the state’s 6.5% state sales tax on food, the average family of four would save $500 per year, according to Kelly’s office.Courtesy of Kansas Governor’s Office

Grocery shopping is one of the common denominators of humanity. Even the uber-wealthy have probably, at one point in their lives, ventured into a grocery store. We all have to eat.

That’s why so many times you will hear economists and pundits frame conversations about the economy and inflation in relation to the price of goods on the grocery shelves.

In the past year, prices at the grocery store checkout have soared because of supply-chain disruptions. From the food manufacturers to the grocers, everyone is seeing higher costs for commodities and transportation, and recruiting and retaining labor as well. And consumers pay the price.

According to the U.S. Department of Labor’s consumer price index, inflation in the U.S. rose to 5.3% in the 12 months through August. That’s compared to an average of about 1.7% over the past decade.

Compared to last October, every aisle in the grocery store is seeing sharp price increases — meat, poultry, fish, eggs, dairy, fruits, vegetables and cereals.

Axe the food tax

That’s why it was such a big deal this week that Kansas Gov. Laura Kelly announced she’s introducing a bill in the Kansas Legislature to eliminate the 6.5% state sales tax on food.

The Kansas food sales tax is the second-highest in the nation and has been around since the 1930s. And antipoverty advocates make a point that it targets low-income households disproportionately, because they spend a larger percentage of their income than higher earners. If you can only afford Dollar General or Aldi prices, you likely can’t afford to shop in bulk at the larger warehouse stores to get bigger savings per unit.

It’s been reported by the governor’s office that if we “axe the tax,” a Kansas family of four will save an average of $500 or more on their grocery bill each year.

That’s a catchy slogan, I admit. But we’ve gone down this road so many times before as a state. And like a monster in a horror movie, every time, the food sales tax comes back to life — no matter how many times it’s hacked.

Final blow

Now, it’s worth noting that cutting the state’s food tax has long had bipartisan support. In theory.

It’s the actual nitty-gritty of how to do it that has been bogged down in partisan politics.

Fiscal conservatives want to know: How will we make up the $400 million a year that this tax brings into the state’s coffers? And how do we do this in a time with high inflation that’s affecting consumer pocketbooks, as well as producers’ and manufacturers’ bottom lines?

The governor’s office reported at the start of November that the state’s revenue numbers continue to out-pace estimates. In October Kansas collected $662.7 million in total taxes for the month, or 18.7% more than the estimate. Individual income tax collections were 18.3% higher, at $301.6 million. Corporate income tax collections were $40 million for the month, or 166.8% more than the estimate. And retail sales tax collections were $227.7 million, or 8.4% over the estimate for the month.

Logic dictates that if we cut one thing, we have to balance it with increases in something else — right?

But Democrats in Kansas point to how the steps the Kelly administration has taken to pull back from the Brownback tax cuts have helped cover the cost to fund public schools, fix roads and bridges, expand high-speed Internet access, and will pick up the slack from losing the food sales tax.

And Kansas Attorney General Derek Schmidt, the Republican most likely to be nominated to run for governor next year, has himself called on lawmakers to cut the food sales tax. Or at the very least, cut it significantly.

We’re at a point where, faced with inflation increasing consumer prices across the board, slashing a food sales tax could prove to be very popular for whichever party makes it happen and can claim credit with the voters.

I just hope that this can come to fruition without increasing tax burdens on farmers and ranchers — who, by the way, don’t typically get a larger percentage of the consumer’s food dollar when prices rise at the store.

We must remember that while everyone eats, not everyone grows the food that’s on that grocery store shelf.

 

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