Kentucky Center for Economic Policy: Troubling Hints About Direction for Tax Reform

The corporate tax cuts described above mean profitable businesses chip in less for the public services that help them succeed. And the result of less reliance on income and inheritance taxes is clear (see graph below): those at the top in Tennessee and Indiana pay an even smaller share of their income in state and local taxes than the wealthiest Kentuckians do, and their lowest-income residents pay an even higher share than the poorest Kentuckians. Tennessee has the 7th-most regressive tax system of all 50 states and Indiana has the 10th-most regressive while Kentucky is ranked 33rd, according to a study by the Institute on Taxation and Economic Policy.

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