Kansas’ May tax collections show rebound; state’s tax structure criticized

Kansas’ economy is showing signs of rebounding with May 2021 tax collections totaling 134.7% over May 2020 and 93.7% over the May 2021 estimate.

“Our May tax receipt numbers are good news and show that our efforts to strengthen Kansas’ economy are paying off,” Gov. Laura Kelly in a statement. “We will continue moving forward by prioritizing pro-growth policies that will support Kansas businesses and Kansas families.”

Kansas seems to surpass expectations.

“Overall, the economy performed much better during the pandemic than any state had forecasted and the tax receipt trend in Kansas is comparable to that experienced in other states,” Revenue Secretary Mark Burghart said.

Both individual and corporate income tax collections, as well as retail sales and compensating use tax collections, were significantly above the receipts collected in May 2020.

Dave Trabert, CEO at Kansas Policy Institute, told The Center Square that exorbitant tax collection says much more about people and businesses in Kansas being over-taxed and having a lousy revenue-estimating system.

“We have the worst effective tax rates on mature businesses, and Kiplinger’s says Kansas is the fourth-worst tax environment for retirees,” Trabert said. “Kansans were hit with income tax hikes in 2017, 2018 and 2019. We have the ninth-highest combined state and local sales tax rate, and some of the highest effective property tax rates in the nation.”

Trabert said the state’s revenue estimating system is also notoriously inaccurate.

“Individual income tax collections caused the vast majority of the excess over the estimate, with a 155% increase over last May,” Trabert said. “Employment is tracking to take until sometime next year to get back to pre-pandemic levels.”

Much of the increase in individual income tax receipts are due to capital gains.

Kansas lost private-sector jobs in April, showing the Kansas economy is in its fifth straight decade of economic stagnation, trailing the national average in job creation and GDP according to Trabert.

This article was originally posted on Kansas’ May tax collections show rebound; state’s tax structure criticized

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