Kansas Senate Bill Substitute HB 2117

In May 2012, Kansas Governor Sam Brownback signed into law the Kansas Senate Bill Substitute HB 2117, one of the largest income tax cuts in Kansas' history. The bill was introduced in January 2011, was approved by Brownback on May 2012, and became effective on July 1 in the same year.

The law eliminates income taxes for the owners of 191,000 businesses, and cuts individual's income tax rates. The income tax cuts would provide US$231 million in tax relief in its first year, growing to US$934 million after six years. A forecast from the Legislature’s research staff indicated that a budget shortfall will emerge by 2014 and will grow to nearly US$2.5 billion by July 2018. The cuts were based on model legislation published by the American Legislative Exchange Council (ALEC).

Brownback described the tax cuts as a live experiment, stating that "[o]n taxes, you need to get your overall rates down, and you need to get your social manipulation out of it, in my estimation, to create growth. We'll see how it works. We'll have a real live experiment."

In an op-ed dated May 2014 in The Wall Street Journal, titled "A Midwest Renaissance Rooted in the Reagan Formula", Brownback compared his tax cut policies with those of Ronald Reagan, and announced a "prosperous future" for Kansas, Oklahoma and Missouri, by having elected the economic principles that Reagan laid out in 1964. The Kansas tax cuts were enacted as a result of a bill signed into law by Kansas' governor Sam Brownback on May 22, 2012. The cuts reduced the state's income tax rates across the board; specifically, it reduced the top income tax rate from 6.45% and 6.25% to 4.9%, and reduced the bottom rate from 3.5% to 3%. The same bill also eliminated one of the three brackets in the state's tax plan, as well as the entire income tax owed by hundreds of thousands of small businesses across the state.

The original bill proposed by Brownback included a provision to increase the state sales tax, as well as the elimination of numerous tax credits and deductions, to offset the losses expected to result from the cuts. However, after he sent this bill to the legislature, they removed the deductions before sending it back to him, after which he signed it into law. Brownback signed the bill into law with the objective of stimulating job creation and economic growth, arguing that the cuts would pay for themselves by increasing revenue by boosting the state's economy. Supporters of the cuts pointed to projections from the Kansas Policy Institute which predicted that it would lead to a $323 million increase in tax revenue. Brownback also predicted that in each of the next four years, the cuts would bring 25,000 new jobs to Kansas.

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