Nick Jordan: State tax policy helping create jobs
11/14/2013 12:00 AM
11/13/2013 5:22 PM
A recent letter addressed the new tax policy in Kansas, specifically small businesses and individual income tax (“State tax policy unfair to workers,” Nov. 5 Letters to the Editor).
In Kansas, 98 percent of our businesses have 100 employees or fewer, and 77 percent have 10 employees or fewer. According to the Small Business Administration, small businesses like these create two-thirds of new jobs.
Our new tax policy in Kansas exempts nonwage business income from state income tax so small businesses will have more to reinvest in jobs and growth.
In the first eight months of this new pro-growth tax policy, key tax revenue categories show that these businesses are doing just that. And we consistently hear stories around the state that back up these revenue indicators.
Recently, I was in Wichita for a Hispanic Small Business Summit. On behalf of her clients, a certified public accountant stood to thank the state for the tax relief and stated that small businesses are truly reinvesting to grow their business and are hiring new employees.
A small-business owner stood to say that, thanks to the new tax policy, he will be adding five offices and hiring employees.
Regarding individual income taxes, the tax relief that took effect Jan. 1 lowers individual tax rates for everyone by 14 to 24 percent. In tax year 2013, the upper rate is 4.9 percent and the lower rate is 3 percent. By 2018, these rates will be further lowered to 3.9 percent and 2.3 percent. Every income level realizes a reduction in tax rates.
In addition, we retained the earned income tax credit, increased the standard deduction used by two-thirds of taxpayers and provided a food sales tax credit to further help lower-income families. Itemized deductions, including the home mortgage interest deduction, are not eliminated but adjusted in relation to the income tax reductions.
Kansas over the past decade has lost jobs and the economy has been static. It is time we put in place policies that grow the Kansas economy by allowing Kansans to keep more of their hard-earned money and small businesses to have the capital they need to grow their business and create jobs while funding the core responsibilities of government.
Instead of just talking about pro-growth tax relief and a fairer, flatter tax system for Kansas families, Gov. Sam Brownback and the Legislature have actually delivered it.