Kansas Better Off Before Tax Changes

May 11, 2015

How much are the unprecedented tax changes helping the average Kansan? Not a lot. Despite claims that tax policies are “putting more money in people’s pockets,’’ we’re actually seeing a slowdown in the growth of personal income compared to before the changes were signed into law.

Recently, the tax policies were touted as having raised the incomes of all Kansans (Tax policy growing Kansas, April 29). But there’s a problem with the figure discussed. The median income figure is a two-year average that includes both 2012 and 2013 – and the new tax changes didn’t go into full effect until 2013. This means we can’t see how median income in Kansas grew before and then after the changes took effect.

Measuring growth in raw terms doesn’t tell the whole story. While true the median income grew by more than $2,000 in the time period straddling the new tax policy, that doesn’t mean most Kansans are out-earning our counterparts around the country. In fact, according to the U.S. Census Bureau, we ranked in the bottom half of states (27th overall) and our income was about $700 less than the U.S. median income.

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While stacking Kansas’ median income growth against the rest of the country illustrates we’re not making the grade, there’s a better way to measure the progress and the prosperity of Kansas families. Personal income, which looks at investments, rental property, interest and more, is both a better gauge and it’s the same measure used by the state’s own Consensus Revenue Estimating Group.

Examining the gains of Kansans by using personal income also lets us clearly examine Kansas’ performance before and after the tax changes – and the results are not impressive. Using Bureau of Economic Analysis data, personal income growth between January 2010 and December 2012 (before the tax changes went into effect) and January 2013 to December 2014 (after the new tax policies went into effect and the most recent available data), shows that Kansas has fallen behind in comparison to other states. In fact, before the tax changes went into effect, Kansas’ personal income growth ranked 13th overall. After the changes were enacted Kansas’ personal income growth fell to 32nd.

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It’s clear the new tax policy isn’t creating a windfall for the average Kansan. Additionally, it appears this trend will continue, as economists from around the state have lowered our projected personal income growth from 4.2 percent to 3.4 percent for 2015.

This comes on top of all the other consequences Kansans will suffer like roads and bridges left to deteriorate as we make alarming transfers from our highway funds to plug other budget holes. Or the dramatic drop in support for education for our youngest learners to our college students. Or reductions to programs and services that keep Kansans healthy and safe, and cut backs in our public libraries and meal services for seniors – just to name a few.

If the new tax policies are bettering Kansans’ lives, why are the statistics – and their pockets – telling a different story?

ClayKansas Better Off Before Tax Changes