At Kansas, residences are creative and entrepreneurs. The small business owned by Kansas residence account for more than 92 percent of the total employers in the state and account for almost 45 percent of the private workforce. Unluckily, the state tax codes have added heavily and irrelevant weight to the group which makes them remain held back from adding other economic benefits to the state economy effervescence. Reforming Kansas tax code by process of eliminating the state income tax in favor of increased sales tax would be a better support to the Kansas economy (Wildavsky & Caiden, 2004).

In general, state personal income tax is part of business tax. Some of the smeller businesses such as S corporations, sole proprietorships and LLCs are subjected to state personal tax and not corporate income tax which is applicable to the large firms (Anders & Shook, 2004). Staging out the state income tax will have chances of increasing the entire economic growth; encourage job creation and investment while attracting more talents and entrepreneurs from other states. It is relevant to highlight that, states that have eliminated the state income taxes have been outperforming the national average in other areas such as job growth, population growth and personal income growth (Wildavsky & Caiden, 2004).

Kansas state income taxes have been placing the economy at competitive disadvantages when it comes to fostering, attracting and maintaining businesses. All residences of Kansas have been suffering from such attributes related with few jobs and few businesses. However, Kansas has various steps that would improve the phase-out of income tax to ensure it is in a position where it competes for and achieve better support (Anders & Shook, 2004).

In the short run, such change will boost the economic growth due to the incoming business growth. The process will be connected with process of cutting wasteful spending; Kansas will be able to eradicate state income taxes without reduction of fund services that are depended upon by the residences. Generally, the state income tax may be phased out in almost six to seven years if the policymakers in the economy will consider combination of there core process (Wildavsky & Caiden, 2004).

First, the policymakers will be expected to maintain level of spending that is low by making sure that the state budget will not be more than 2.3 percent yearly and apply the excess revenues in lowering the state income tax rate on yearly basis (Anders & Shook, 2004).

Secondly, the state Legislature must consider reforming the economy spending policy, incorporate urban revenue share. In general, Kansas City government do receive lump of state income tax revenue yearly without closer oversight (Wildavsky & Caiden, 2004). There is lack of accountability which causes wasteful spending within the city level. To reform the tax program, it is worth to ensure that the shared revenue will only go to the needy cities a process that would result to substantial state budget saving (Kansas, 2013).

In addition, the Legislature must ensure that it amend the current laws that pertain forbidding the city level income tax. All city leaders could ask the residence to raise the level of local taxes to fund the spend increment (Anders & Shook, 2004). Such policy would be worth and would encourage a level of accountability within the city governments since leaders may not push cost to the taxpayers who do not reside in the city (Wildavsky & Caiden, 2004).

However, the outcomes would be different for every city. If the residence would vote for the temporarily increase in state sale taxes by less that one percent. In general, the progress of increasing would move towards the reduction of the state income tax to zero level. After the state income tax reach zero, the additional one percent sale tax rate added would as well be eliminated bringing it to almost 5.4 percent (Anders & Shook, 2004). The aspect of spending discipline during the state income tax phase down with healthy economic growth will be essential when it comes to making such part of the reforms that are necessary (Kansas, 2013).

This steps that have been suggested may not be immediate. However, such program would provide six or seven year approach within the state level. The phased suggestions indicate little or no disruption on the spending capacity whereby it may result to increased level of economic growth with simultaneous review of unaccountable and wasteful spending capacity. Kansas need tax reforms that would work for all residence (Kansas, 2013). Elimination of state income tax would provide significant support to the level of state entrepreneurship. Kansas is the best home for the innovators and creators and when being taxed unfairly makes them remain back. It is worth to reward the drive and ensure that they receive incentives and overall benefits will be reaped (Anders & Shook, 2004).

However, despite this being the case, proponents argue that elimination of state income taxes and enlarging the sales tax would make the tax system to be more simple, fair and favorable for business with no net revenue losses. In fact, the program will change the state taxes against the lower and middle income households with chances of undercutting the state capacity of maintaining public services (Wildavsky & Caiden, 2004). In general, the policy has chances of:

Raising the taxes for the middle class: in this case, the proposal by the state governor may have a significant change to the distribution of state taxes. The lower and the middle income household may pay more while the businesses and the higher income household would have to pay less. This may be the case since repealing the state income tax may disappropriately be beneficial to the high income households and sales taxes would hike and impact the lower and middle income households (Kansas, 2013).

Involve massive sale tax increment: state income tax raise almost 40 percent of the state tax revenues- amount that is equivalent to the total state spending on the prisons, state police, public heath, public parks, public hospitals and highways. To replace the lost revenue, the state sales tax rate need to be high than the current one and may be higher than expected (Anders & Shook, 2004).

The proposals tend to vary and most policymakers may request for examination of the exemption provided on sale tax with a focus on the extension of tax to some other goods and services. This incorporates everything ranging from the child care, home sales and various business to business transactions (Mikesell, 2010). Large number of goods and service will be introduced to new tax base which will attract significant high rates an aspect likely to cause technical, economic and political issues.

References:

Mikesell, J.A., (2010). Fiscal Administration: Analysis and Applications for the Public Sector. 8th ed. Belmont, CA: Wadsworth Publishers.

Wildavsky, A., & Caiden, N., (2004). The New Politics of the Budgetary Process. 5th Ed. New York: Longman.

Anders, K., & Shook, C. (October 01, 2004). New federalism: Impact on state and local governments. Sage Public Administration Abstracts, 31, 3.)

Kansas. (January 01, 2013). Report of the Legislative Budget Committee to the 2013 Kansas Legislature. Committee Reports to the 2013 Kansas Legislature

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