Disclose cost of state tax credits

The Kansas Department of Revenue needs to end its decades-old policy of not disclosing – even to state lawmakers – the cost of tax credits if claimed by fewer than five tax filers.

The purpose of the secrecy is to preserve taxpayer privacy, but it means that the public and policymakers can’t assess the cost and effectiveness of the credits. This lack of data is particularly a concern now, because the Legislature eliminated or reduced various tax credits and deductions and raised the sales tax to help fill the state’s budget shortfall. More tax changes may be needed next year.

As Senate Vice President Jeff King, R-Independence, noted, it’s hard for lawmakers to make good decisions on tax policy “if there are certain tax credits we don’t even know what we’re spending on.”

Missouri doesn’t withhold this information. It maintains an online database from which anyone can learn who claimed what tax credit and at what cost.

Tax credits are another form of public subsidy. Rather than writing a check, the state allows businesses or individuals to claim a credit that lowers their tax bill – but the net effect is the same. And tax credits should be disclosed, just as cash subsidies are.

For those filers who don’t want this information made public, Sen. Jeff Melcher, R-Leawood, offered a simple solution: “Then don’t take the money.”

For the editorial board, Phillip Brownlee

This story was originally published July 16, 2015 at 7:07 PM with the headline "Disclose cost of state tax credits."