No Data to Back Up Kansas’ LLC Tax Break Benefits

Wichita Eagle:

There’s no hard data to support the claim that a tax exemption for business owners is spurring job growth in Kansas, a state analyst told a House committee Thursday.

The exemption – which has allowed more than 330,000 business owners and farmers to pay no income tax – is one of the more controversial features of a tax law championed by Gov. Sam Brownback that went into effect in 2013.

Supporters of the exemption, including the governor, say that it has fueled job growth.

But it is difficult to prove that the exemption directly caused new jobs. analysts from the Legislative Research Department and Department of Revenue said Thursday.

Some key lawmakers – including Senate President Susan Wagle, R-Wichita, and House Tax Chair Marvin Kleeb, R-Overland Park – want to revisit the exemption as they try to fix a budget deficit projected at more than $400 million for next year.

The governor and other Republican lawmakers don’t want to touch the exemption. 

The state gained about 34,400 nonfarm jobs between January 2013, when the law went into effect, and January 2015. That growth has coincided with a national economic recovery.

Rep. Ron Ryckman Sr., R-Meade, asked for data on how many jobs had been produced by the exemption. He was told that such data doesn’t exist.

“The great question is to what extent is some of that growth what we would have had anyway or what part of it would have been stimulated as a result of the new tax law changes,” said Chris Courtwright, principal economist for Legislative Research. 

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