Columbus, OH – A new report, Reforming Kansas Tax Policy, released Monday by the Economic Research Center (ERC) at The Buckeye Institute, found that cutting taxes in Kansas could lead to hundreds of millions in economic growth and business investment. The ERC partnered with Kansas Policy Institute to conduct the research. 

“With regional competition for businesses and workers, Kansas must revisit pro-growth tax reforms to keep the state economically competitive,” said Zachary D. Cady, associate economist at the Economic Research Center at The Buckeye Institute and co-author of Reforming Kansas Tax Policy. “The tax reforms The Buckeye Institute analyzed can spur economic growth, and Kansas policymakers should strongly consider the results and pursue relevant policy changes.”

INFOGRAPHIC: Reforming Kansas Tax Policy

Using a dynamic scoring model—STELA (state tax and economic long-run analysis)—developed by economists at Buckeye’s Economic Research Center, the report’s authors analyzed five scenarios to give Kansas policymakers a better understanding of how each proposal will affect the state’s businesses, families, economy, and revenues. 

Scenario One: A $370 million personal income tax cut, $50 million corporate income tax cut, and $50 million sales tax cut generates $390 million in economic growth and $220 million in business investment in the first year. This scenario, in particular, has a strong chance of passing the Kansas legislature in the upcoming session.

Scenario Two: A $500 million corporate income tax cut generates $550 million in economic growth and $360 million in business investment in the first year. 

Scenario Three: A $500 million personal income tax cut generates $430 million in economic growth and $240 million in business investment in the first year.

 Scenario Four: A $500 million sales tax cut generates $160 million in economic growth and $50 million in business investment in the first year.

Scenario Five: A $500 million capitated rebate generates $270 million in economic growth and $140 million in business investment in the first year.

“In practical terms, lower taxes enable opportunities and human flourishing,” said James Franko, president of Kansas Policy Institute. “States that have lower taxes make the American Dream obtainable for more of their citizens. The economic reality of low taxation means one thing for working families—the dignity of earned success.”

Reforming Kansas Tax Policy was authored by Zachary D. Cady, an associate economist at the Economic Research Center; Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute; and Trevor Lewis, an economic research analyst with the Economic Research Center. 

Consistent with academic standards and methodologies, STELA underwent a double-blind peer review. A full methodology and technical description are available in the report’s appendix, allowing researchers to validate STELA’s accuracy and conclusions.

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