Kansas sales tax increase would cost jobs

by Bob Weeks on February 3, 2010

in Kansas state government

The Goldwater Institute has issued a report on the lost jobs that an increase in the Arizona sales tax would cause. According to projections by the Beacon Hill group, the one cent increase in the sales tax would bring in $1 billion annually to Arizona state government. But the cost of this sales tax would be 14,400 private sector jobs.

Arizona has about 2.3 times the population of Kansas, so a similar analysis would probably show fewer jobs lost in Kansas. But the number would still be high, we can be sure.

Taxes on transactions — that’s what a sales tax is — drive a wedge between buyer and seller. The result is that fewer transactions occur. That leads to a loss of jobs.

Additionally, more money in the hands of government means less in the hands of the private sector. Wealth is lost as inefficient and ineffective government spending replaces private spending and investment.

We should also be accurate in reporting the magnitude of the proposed sales tax increase in Kansas. Proponents often say it’s just one percent. In reality, it’s an increase of one cent on every dollar spent. As the current Kansas statewide sales tax is 5.3 cents on each dollar spent, increasing that by one cent to 6.3 cents is a tax increase of 18.9%.

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Tagged as: Kansas state government, Taxation

{ 2 comments… read them below or add one }

1 Pat February 3, 2010 at 9:15 pm: Interesting. I went to the links and there was no study per se to be found.
2 Betty February 5, 2010 at 8:35 am: The Ks. sales tax is already 6.3% on everything except food;that tax is 4.2% I think,not as much as regular sales tax,but still one of the most hurtful!! I believe Kansas is only one of 14 states that taxes food!!!
No sales tax on food in Ky. where I am from,it aggravates me every time I go to the grocery!!In Ky the sales tax is 6%.

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