The Institute on Taxation and Economic Policy (a D.C.-based “think tank”) has released a new report on Kentucky’s inadequate tax structure.
The report, Tax Reform in Kentucky: Serious Problems, Stark Choices, examines two key problems with Kentucky’s tax structure. It’s not only insufficient, failing to produce enough revenue for public services, but is also inequitable, forcing low-and-middle-income residents of the Commonwealth to pay more in taxes than wealthier individuals and families– relative to their incomes.
Two tax measures presented to the Interim Joint Committee on Appropriations and Revenue (last week) are also examined. Bill Farmer introduced House Bill 51 PHS (repeal personal and corporate income taxes, repeal limited liability tax, reduce sales tax to 5.5%), which would seriously exacerbate the main problems we’re facing by aiding the wealthy. And HB 262/HB 223 (raise taxes for the super-wealthy, offer tax credit based on earned income, reinstate estate tax, lowering taxes for the poor), presented by Jim Wayne, would improve the adequacy and equity of the system.
You’ll want to check the report out for yourself:
CLICK FOR PDF
Our favorite bit of the report? This bit about Farmer’s ridiculous HB 51, showing that had the legislation been implemented in 2007, the provisions would have:
- Increased taxes markedly for the very poorest Kentuckians. Families and individuals with 2007 incomes below $14,000 would have, on average, paid $136 more in taxes had HB 51 PHS been in effect; this is the equivalent of 1.6 percent of their income on average.
- Reduced the taxes paid by middle-class Kentuckians by roughly 1.1 percent of income on average. That is, Kentucky taxpayers with incomes ranging from $27,000 to $45,000 in 2007 would have seen their taxes go down by $373 on average if HB 51 PHS had been made law.
- Reduced taxes dramatically for the very wealthiest Kentuckians. In 2007, the top 1 percent of Kentucky taxpayers consisted of individuals and families with incomes in excess of $329,000. These taxpayers would have received an average tax cut of $40,910 – or 4.4 percent of income – due to the changes contained in HB 51 PHS.
Obviously not a good thing for most Kentuckians.
What’s your favorite part of the report?
Observation: Let’s not hold our breath about real tax reform in Kentucky. It’s pretty clear that no one in Frankfort is going to answer our prayers.
5 responses so far ↓
1 Taylor // Jun 9, 2009 at 5:23 pm
thanks for providing that report – I’d been wanting some of the concrete numbers about state revenues between the two plans. I’m with you on not having high expectations for our state legislature, but this shows pretty clearly that Farmer’s “reform” isn’t much of a change, after all.
2 Sirico // Jun 9, 2009 at 5:45 pm
I have an answer to Kentucky’s tax problem. Maybe we can get some of our Right-wing Conservatard brothers to hold another “Teabag Party” and score us a big tax break (HB 51 PHS ). It would put more money into the pockets of the poor and middle class during a time of recession/depression. That ought to solve our tax problem here in the Commonwealth. (Duh!)
3 Bimbeau // Jun 9, 2009 at 7:41 pm
Thee-uss ee-uss Kain-tuck-ee. Stoopid is ay-uss stuupid duzz. Tay-uxxux R pay-ud onney by duh pu-ur.
When Ky dumps Republican’ts & the Mongis, maybe we can have a progressive income tax.
Until then poor pay more.
4 Bruce Maples // Jun 9, 2009 at 10:48 pm
Jake — nice catch — thanks for the link and the PDF. Wayne’s bill deserves to be heard and passed!
5 Pat Z // Jul 12, 2009 at 5:32 pm
My big concern is the “Lost of tax money” in tourism. Does anyone not see that we have destroyed a “whole industry” here in our state with the school schedules that have evolved over the last 12 years! When will someone wake up.
We are even off beet with the rest of the world. Our company hirers college age exchange workers from abroad. They never have to return to school until September at the earliest. And..now we are also not able to fit our programs for high school exchanges that correspond to other nations.
The excuse that our calender was old fashion based on an agricultural society. This is wrong. I do not believe Germany or England fit this mold.
Many other states have taken action to reverse such a trend –where does ky stand here. Little action that I am aware of is taking place. Well, I guess we may get “one benefit” from this bad decisions–soon we will need less state park–so closing them will not be so painful.
If I am missing something please let me know and how I can help as well. PZ
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