A plan to boost growth in Kansas
The Kansas City Star
Earlier this month, working Kansans began to see the fulfillment of Gov. Sam Brownback’s campaign promise to increase personal wealth as the state’s income tax rate dropped 14 to 24 percent.
Unlike itemized tax deductions, the rate decrease benefited all working Kansans — from teenagers working their first job making minimum wage to those established in their career and commanding a generous paycheck.
The new tax law also means people filing as a married couple or single head of household will face a lower tax bill when they file next April.
The standard deduction — which is claimed by more than 70 percent of Kansans — increased to $9,000 for single head of household filers and married taxpayers filing jointly.
This means that the single mother working to support a family will see her deduction double for tax year 2013.
This year, the governor is proposing further steps to take Kansas on a glide path to zero state income tax, with a fairer, flatter, simpler state tax code.
The overall goal is a tax base much broader, with lower rates.
Reducing income tax rates for everyone will allow working Kansas families and businesses to keep more of their own hard-earned money and allow them to decide how it is best spent.
In exchange for this economic boost that benefits the majority of Kansans, the plan leaves the state sales tax flat and eliminates the mortgage interest and real estate deductions.
The state deductions are a benefit to less than a quarter of the state’s tax filers and average about $400. As income tax rates go down, these deductions become less valuable.
The governor’s plan for decreasing the income tax rate will put about $500 into the pockets of a median income Kansas household.
These changes will have no effect on the much more valuable federal deductions.
The decision to focus our efforts on decreasing the income tax is deliberate.
Economists and studies alike agree that the best tax plan is one with a broad base, few special interest deductions or credits and a low rate.
In December, the non-partisan Tax Foundation released a study title “What Is the Evidence on Taxes and Growth?” which concluded that one of the best ways to grow the economy was to decrease income taxes.
“Taxes on income and wages reduce the incentive to work,” the study said.
The last 10 years have been a lost decade for Kansas — one in which our state has lost private sector jobs and population to low-tax states such as Texas.
With these changes, we aim to create a simpler tax code — one than encourages private sector job growth and fosters entrepreneurship. This will help reverse the course on our lost decade and expand our economy.
Nick Jordan, of Shawnee, is director of revenue for Kansas.