Gov. Sam Brownback hailed the 15,780 new Kansas businesses established in 2014, saying last week that “this mark of health for the Kansas economy is the result of our pro-growth tax policies.” Adjusting for the entities that went out of business, there was a net total increase in Kansas businesses of 9,753 last year, the Topeka Capital-Journal reported. That’s the highest increase since 2006, when there was a net increase of 14,810. With all these new business formations, why isn’t the state’s budget doing better? One reason is that most new businesses likely are registering as limited liability corporations or S corporations, which exempts them from paying state income taxes. Some of these “new” businesses might also be existing businesses that simply reorganized in order to take advantage of the tax exemption. – Phillip Brownlee
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