A House Committee has introduced a measure designed to waive taxes on new businesses.
Wednesday morning, the House Taxation Committee introduced a bill crafted by Rep. Joe Patton, R-Topeka, that he said would “promote the creation of new jobs.”
Patton told the committee that the Kansas Legislature should focus on creating jobs and that the state needed public policy that will grow the state’s economy, in light of the current recession and declining revenues.
“We know from history most new jobs coming out of a recession are created by new small businesses,” Patton said. “However, the government hits these new small business with the same burden it applies to large corporations, as a result in part 90 percent of these business fail the first year.”
The bill would waive withholding taxes and self-employment taxes for new small businesses with 10 or fewer employees for the first year of operation.
“This tax burden can make the difference between success and failure,” Patton said. “If they can survive the first year, there is a large chance they will be around for a long time.”
Pittsburg democrat Julie Menghini, who sits on the House Taxation Committee, said that it has to be a cautious road when discussing Patton’s bill.
“We are all concerned about job creation, but at some point we have to pay,” Menghini said. “We have to decide whether it is cost-effective to essentially give away the farm.”
While the committee took no action on the measure, Patton said that it was important to help small business.
“My goal with this legislation is to give new businesses a head start by getting off their backs for one year. If the new small business survives the first year, chances are we will have the jobs and the revenue for the long term,” Patton said.
Matthew Clark can be reached at matthew.clark@morningsun.net or at 620-231-2600, Ext. 140
