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Kansas House Advances Bill to Expand Tax Breaks for Businesses |
The Kansas House passed a tax break for businesses bringing workers to the state even with lingering concerns that the deficit mired state can't afford it. The bill expands an incentive program created last year to encourage companies to move jobs from other states to Kansas. Basically, more companies would be eligible, as would nonprofit groups and even some federal government agencies, and the wages they’d have to pay would be lower than they have to pay now.
Democrats in the GOP controlled House said that taxpayers would be subsidizing jobs that don’t pay a living wage. Democrats also complained about the lost revenue at a time when the state faces a half a billion dollar deficit. Republican proponents asserted that lost revenue would be made up by sales taxes on purchases by newly hired workers.
The program now applies to companies that move at least five jobs from another state if they create jobs that pay at least the average wage in the county to which they move. Eligible companies are allowed to keep 95 percent of the state income taxes that would be withheld from the paychecks of their Kansas workers. The proposed expansion would make companies, nonprofit groups and some federal agencies eligible if they create new jobs in Kansas, rather than just moving them from another state. Out-of-state companies also would be eligible if, upon buying a Kansas firm, they kept its jobs in the state. Also, the wages they paid to qualify would have to meet or exceed the wages paid in half of the jobs in the county. That figure is usually lower than the average.
Why is this a bad proposal? The corporation gets to keep the tax revenue due the people of the state. When you face a massive deficit, how do you justify such a tax give away?
Taxing Kansans to lure and subsidize their competitors
Posted by Joe Kristan on Mar. 3, 2010 at 08:17 AM
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