And the tax savings compared to filing as an employee can be significant. Under the law, "pass-through" corporate profits are tax-free, compared to the top personal income tax rate of 4.8 percent in 2014.
But the cost to the state is huge as well. So much so, that a plan the governor had billed as "a real live experiment" in conservative economics is testing the mettle of even the most ardent supply-siders.
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The nonpartisan Kansas Legislative Research Department had forecast the tax break would cost the state between $160 million and $165 million this year, based on 191,000 small-business filers in the state.
Instead, with so many more small-business filers than expected—nearly 75 percent above the projections—the cost has ballooned to $210 million. Add the effects of lower prices for farm commodities, oil and natural gas, and the state faces a budget shortfall of as much as $800 million for next fiscal year. That has put the small-business tax break directly in the legislature's cross hairs.
State Senate President Susan Wagle, a conservative Republican, is among those suggesting the law may need to be "fixed." She told The Wichita Eagle last month that it comes down to fairness.
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"A CPA that works for a firm pays income tax, but a CPA who's hung out a shingle and works independently pays no income tax," she said, "or a painter, or an engineer, or a dentist, or a lobbyist. It's all professions and that's just unfair. It's unfair tax treatment."
Democrats, who are in the minority in the legislature and argued against the tax cuts, have been quick to say "I told you so." Last week, Senate Minority Leader Anthony Hensley called on a chief architect of the cuts, economist Arthur Laffer, to refund the $75,000 consulting fee the state paid him.
"While it is unrealistic to believe that Dr. Laffer could refund the billions of dollars in lost revenue, I believe it is more than reasonable to ask for him to pay back the $75,000," Hensley said in a statement.