In 2012, Kansas lawmakers passed a large income tax cut that was intended to reduce revenue from taxes by a little more than 10 percent,according to Josh Barro writing for The New York Times. Gov. Sam Brownback said at the time that these cuts would create “tens of thousands of jobs,” which would more than justify the cut. This cut reduced tax rates and increased the standard deduction, as per usual, but also eliminated the tax on a number of income types entirely, including that on 1099-MISC income, which is sometimes referred to as “small business income.”
Abilene, KS
Unfortunately, these cuts may have had an unintentionally large effect, as the state expected to collect $651 million from personal income tax in April and May, according to the news source. It received $369 million.
Unfortunately for Kansas, it seems that the tax cuts are also doing little to effect job creation, and employment figures have trailed both the national average and those of most surrounding states since he signed the bill, Barro explained.
Part of the problem may be a misunderstanding as to what “small business income” is. While there exists a stereotype of small businesses as the employment leaders that drive the economy, many on-paper small businesses do not employ anyone. A writer who freelances for a variety of publications, for example, is considered a small business, as is a contractor and anyone else who works for him- or herself.
Another problem is that many people are able to “shift” income from one category to another. By eliminating tax on 1099-MISC forms, Kansas made it extremely attractive to collect income in this way.
Finally, an economic study conducted in 2013 and published in The Review of Economics and Statisticsfound that, while new companies create more jobs than old ones, small companies were no more likely than large companies to create jobs.
Find out more about the changes going on in the Sunflower State:
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Monmouth County's Next Development Wave: What Developers and Investors Need to Know
Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
.jpg)
