The Washington-based Tax Foundation, which conservatives regularly cite, isn’t impressed with Kansas’ new law eliminating income taxes on many businesses. “The small-business exemption creates an incentive for businesses to structure themselves as pass-through entities for tax reasons, even though it might otherwise be unwise for them to do so,” said Tax Foundation economist Mark Robyn. “Furthermore, promoting pass-through entities will not necessarily create net new jobs. Favoring those businesses over traditional C-corporations may lead to an increase in people employed by pass-through entities, but many of these ‘new’ pass-through entity jobs may simply be reclassified C-corporation jobs.” Some state lawmakers also questioned whether the cost of the tax cut will be greater than projected, if businesses reorganize in order to take advantage of the tax break.
Registered?Commenting on WE Blog now requires you to be a Kansas.com member. Use the links above to register, if you haven't already, or to log in.
Do you tweet? Follow us on Twitter: @WE_Tweet.