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Impact of Kansas Tax Reform 2012: A Comprehensive Overview with Projections

Explore the significant tax reform in Kansas for 2012 and its implications, including changes to personal income tax rates and deductions, with projections on economic growth and job creation.

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Impact of Kansas Tax Reform 2012: A Comprehensive Overview with Projections

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  1. Tax Reform in Kansas for 2012 Steven J. Anderson, CPA, MBA Director of the Budget

  2. Do Personal Income Tax Rates Matter?

  3. Source: Kansas Department of Revenue

  4. Kansas Net Resident Migration 2004-2009 Kansas lost a net total of 9,490 residents to surrounding states Number of People Source: Internal Revenue Service

  5. What is in HB 2117 • Eliminate non-wage income for PIT • Reduce income on the first $30,000 for married & $15,000 for individuals from 3.5% to 3.0%. • Eliminate the 6.25% rate and reduce the 6.45% on income over $30,000 for married & $15,000 for individuals to 4.9% • Increase the standard deduction from $4500 to $9000 for single head of household filers and from $6000 to $9000 for married filing jointly • Eliminates the two year exemption on oil severance taxes for wells over 50 BBLs per day • Sale tax of .6 expires in July 2013 • Keeps EITC & food sales tax credit but you must choose which one to retain • Keeps all Schedule A deductions

  6. 21%10-100 employees Source: Kansas Department of Labor, Labor Market Information Services in conjunction with the Bureau of Labor Statistics

  7. Effect of the new tax bill • 14 to 24 percent state income tax rate cut for all Kansans • Over two years (FY13-14), Kansans will keep $1.5 billion more in their pockets to save, spend, and invest ($1.1 billion in income tax; $385.5 million in sales tax) • Projected dynamic impact through FY 2020 o        22,900 new jobs on top of normal growtho        $2 billion more disposable income on top of normal growtho        35,740 increase in population on top of normal growth

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