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[quote=Anonymous]What do you think of the new tax policy?

"Proposed Kansas Tax Break for “Pass-Through” Profits Is Poorly Targeted and Will Not Create Jobs
PDF of this report (6pp.)
By Nicholas Johnson and Michael Mazerov
Revised March 26, 2012
RELATED
More States Propose Reverse-Robin-Hood Tax Policy
RELATED AREAS OF RESEARCH
State Budget and Tax
Taxes
Kansas is seriously considering a new, unprecedented state income tax break — at a huge cost to the state budget — that would benefit large corporations and passive investors, and reward tax avoidance, while failing to meet its stated objective of job creation.  The tax break was first proposed by Governor Brownback earlier this year, and since has been incorporated — in slightly different forms — into bills passed by the state House and Senate.
The new tax break would benefit large corporations and investment vehicles more than the small business job creators the governor and legislative advocates claim they are trying to help.  At the same time, the proposals would cost the state, at a minimum, $245 million or more in annual tax revenue that the state otherwise could be using to strengthen its economy.  (The primary difference among the proposals is that under the House bill, the full revenue impact would not occur until 2018, while it would hit all at once under the Brownback and Senate plans.)
Whenever it takes effect, this provision would:
Create a new and unwarranted tax break for many large businesses.  Under the pending legislation, Kansas would be the first state in the nation to exempt what tax experts call “pass-through” income from an otherwise broad-based income tax. “Pass-through” income is income that — unlike most corporate income — is untaxed at the corporate level and passed through to the owners of a business entity, who normally then pay personal income taxes on it.  Many pass-through businesses are very large, and a substantial share of the profit that would be tax-exempt under the governor’s proposal would be earned by large businesses, not small ones.
Fail to target the small business job creators the governor seeks to help, with negative consequences for the Kansas economy.  A substantial share of the profit exempted from taxation under the proposal is earned by the wealthy owners of large investment funds and other business entities that have no employees.  Another share is earned by individuals who live outside Kansas and would see that income taxed by their home states when Kansas stops taxing it.  Small, fast-growing businesses — those most likely to create jobs — likely would see very little of the benefit.
Make the Kansas tax system less level and create a new incentive for tax avoidance at a time when the state needs more resources for schools, transportation, public safety and other priorities that would create a better foundation for future economic growth."[/quote]

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