Tax Reform in Kansas

Since the last legislative session when no substantial tax reform was accomplished, many legislators have been exploring potential solutions to reform our state tax system with increased urgency because it is so closely related to Kansas’ employment and economic growth problems.

Kansas lost 90,400 private sector jobs between April 2008 and February 2011, an 8% decline. 2010 average annual private sector

employment was less than in 1998 and there is only one state whose average annual private sector employment (through September 2011) is below its 2010 level – Kansas.

At the same time, Kansans have endured a painful tax burden, with increases in sales taxes, income taxes and property taxes.

Consider these facts from the Kansas Policy Institute:
The state and local tax burden has a significant impact on economic growth and Kansas is especially uncompetitive among regional states. Low-burden states have higher job creation, their Gross Domestic Product and population grow faster and their citizens enjoy stronger payroll gains.

Private Sector Job Creation This chart goes back to 1998 to provide a 10-year look back from Kansas’ peak employment in 2008. That comparison revealed a similar pattern; the high-burden states gained 7% private sector jobs but less than the national average of 7.8% and well below the low-burden states’ gain of 14.6%. Kansas gained only 5.2% between 1998 and 2008. Clearly, the tax burden in Kansas has hurt the ability of businesses to add jobs and improve the employment levels in our state.