In Kentucky, the income inequality that exists between our poorest and wealthiest residents is magnified by the structure of our tax system. And thanks to the new tax law enacted by the 2018 General Assembly, that problem is getting worse.
ITEP Work in Action
Advocates and policymakers at the state and federal levels rely on ITEP’s analytic capabilities to inform their debates on proposed tax policy changes. In any given year, ITEP fields requests for analyses of policies in 25 or more states. ITEP also works with national partners to provide analyses of federal tax policy proposals. This section highlights reports that use ITEP analyses to make a compelling case for progressive tax reforms.
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ITEP Work in Action October 18, 2018 Kentucky Center for Economic Policy: New Report Shows Kentucky’s Tax System Worsens Income Inequality
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ITEP Work in Action October 18, 2018 Message-Inquirer: Tax Study Explores ‘Who Pays?’ in Kentucky
A new study from a national economic policy research group suggests Kentucky’s tax structure has become less equitable since the last General Assembly’s tax reform legislation, putting more tax obligation on poor and middle-class Kentuckians.
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ITEP Work in Action October 17, 2018 Kentucky Center for Economic Policy: New Report: Wealthiest Kentuckians Pay the Lowest Tax Rate and the Problem Is Worsening
The study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, evaluates the major components of state and local tax systems – including personal and corporate income taxes, property taxes, sales taxes and other excise taxes – for their overall distributional impact across income groups. For example, Kentucky’s low income tax credit means that people in poverty do not pay state income taxes. However, because the state fails to provide refundable tax credits to offset sales, excise and property taxes paid by low-income people, and because the state has a flat as opposed to graduated income tax rate structure, the poorest 20 percent of Kentuckians pay an effective tax rate 1.42 times higher than that paid by the top 1 percent.
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ITEP Work in Action August 22, 2018 Kentucky Center for Economic Policy: Clean Up the Tax Code to Invest in Our Commonwealth
To move our tax code in the right direction, Kentucky should rejoin 32 other states with a graduated income tax based on ability to pay. Income below $37,500 single/$75,000 married… -
ITEP Work in Action April 20, 2018 Kentucky Center for Economic Policy: New Tax Law Shifts from the Wealthy to Kentuckians of Color and Economically Distressed Regions of State
In the waning days of the 2018 General Assembly, legislators passed House Bill 366 (HB 366), a regressive tax reform package that gives a tax break to the wealthiest but asks more of everyone else, especially low-income Kentuckians. In addition to widening income disparities, these changes will exacerbate existing racial and geographic inequality in our state.
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ITEP Work in Action April 16, 2018 The Chronicle: Value Teachers, Unions to Better Education
It is not a coincidence these movements took place in Republican-led states in which tax cuts take precedence over funding education. An example is Kentucky House Bill 366, which would cut taxes of the state’s wealthiest residents while increasing taxes of low-wage earners, according to the Institute on Taxation and Economic Policy.
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ITEP Work in Action April 13, 2018 Washington Post: Kentucky’s Tax Cut for the Top 5 Percent Survives Despite Governor’s Veto
Republicans in Kentucky’s state legislature overturned Gov. Matt Bevin’s (R) vetoes of their tax overhaul and budget plan Friday, capping a dramatic confrontation between members of the same party that has also seen thousands of teachers descend on the state Capitol in protests for better pay.
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media mention April 11, 2018 CNN: Kentucky Governor Signs Controversial Pension Bill as Teachers Call for Rally
An analysis of that bill by the Institute on Taxation and Economic Policy found it would bring a huge tax cut for the richest 1% of residents, while the biggest tax increase would affect those making less than $21,000 a year.
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media mention April 6, 2018 Courier Journal: Kentucky Tax Reform Bill is a Break for the Rich but a Hike for Everybody Else, Study Says
The tax bill that zipped through the General Assembly on Monday will amount to a tax break for millionaires but a tax increase for 95 percent of Kentuckians, according to an analysis by the Washington-based Institute for Taxation and Economic Policy.
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media mention April 6, 2018 WUKY: A Tale Of Two Tax Studies
“This is a complicated tax plan with a lot of moving pieces, but the net result is clear: that it is middle-class tax hike. Kentucky’s poorest families and the middle class will end up paying more while the state wealthiest taxpayers are going to end up paying less,” ITEP analyst Aidan Davis says.
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ITEP Work in Action April 5, 2018 Lexington Herald Ledger: Study: GOP Bill Cuts Taxes for the Rich, Raises Taxes for 95 Percent of Kentuckians
A new study of the tax bill rushed through the Kentucky General Assembly Monday shows the changes it makes to the tax code are likely to lower taxes for the wealthy while raising taxes for 95 percent of Kentuckians.
The analysis, performed by the Institute for Taxation and Economic Policy in Washington D.C., a liberal-leaning think tank, studied the impact of the tax cuts and increases on Kentuckians.
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ITEP Work in Action April 5, 2018 Washington Post: Kentucky Legislators Send Tax Cuts for Wealthy, Tax Hikes for the Other 95 Percent to Governor’s Desk
The Kentucky legislature passed a sweeping tax overhaul this week, and now lawmakers are asking Gov. Matt Bevin to sign a bill that would slash taxes for some corporations and wealthy individuals while raising them on 95 percent of state residents, according to a new analysis.
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ITEP Work in Action April 4, 2018 Kentucky Center for Economic Policy: House Bill 366 Represents a Tax Shift Away from the Wealthy to Low- and Middle-Income Kentuckians
A new analysis of HB 366 by the Institute on Taxation and Economic Policy (ITEP) shows the dramatically skewed impact of the tax changes on Kentuckians by income group. As can be seen in the graph below, Kentuckians whose income puts them in the top 5 percent will see a tax cut, with those in the top 1 percent, whose average income is $1,042,000, receiving an average tax cut of $7,086.
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ITEP Work in Action April 2, 2018 Kentucky Center for Economic Policy: Tax Plan Is a Tax Shift with Troubling Long-Term Effect on Revenues
The General Assembly introduced a tax bill today that is a shift in taxes away from corporations and high-income people and over to low- and middle-income Kentuckians. Although the official… -
ITEP Work in Action December 21, 2017 Kentucky Center for Economic Policy: Passage of the Dream Act Would Benefit Kentucky
The Institute on Taxation and Economic Policy (ITEP) estimates that 6,000 (formerly) DACA-eligible Kentuckians currently contribute a total of $8.1 million in local and state taxes annually through sales and… -
ITEP Work in Action November 21, 2017 Senate Tax Plan Harms Low- and Middle-Income Kentuckians to Pay for Giveaways to Those at the Top
Senators will return to Capitol Hill next week after the Thanksgiving recess for a potential vote on their revised plan. According to estimates from the Institute on Taxation and Economic Policy (ITEP), the bottom 60 percent of Kentuckians, who make an average of $37,500 a year, will actually face more taxes from the plan with an average increase of $80 in 2027.
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ITEP Work in Action July 21, 2017 Kentucky Center for Economic Policy: Trump Tax Plan Would Be a Windfall for Only the Wealthiest Kentuckians
The wealthiest Kentuckians would be winners from the $4.8 trillion in federal tax cuts President Donald Trump has proposed, as shown by a new report from the Institute on Taxation… -
ITEP Work in Action June 8, 2017 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.
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ITEP Work in Action May 22, 2017 Kentucky Center for Economic Policy: Any Way You Slice It, A Shift To Consumption Taxes Will Hurt Kentucky
According to ITEP, replacing all of Kentucky’s income tax revenue with sales tax revenue would require an increase in our sales tax rate to 13.3 percent – more than double… -
ITEP Work in Action April 17, 2017 Kentucky Center for Economic Policy: What Good Tax Reform Looks Like
In contrast, HB 263 would ask more of those at the top and less of low- and middle-income people who currently pay a larger share of their income in taxes.… -
ITEP Work in Action April 12, 2017 Kentucky Center for Economic Policy: Taxing Groceries in Kentucky Would Hurt Low-Income Families, Weaken Revenue Growth
Lower-income families therefore receive the most benefit from the exemption for groceries. Repealing it would disproportionately increase the share of income they pay in taxes, making Kentucky’s tax system more regressive than it already is.
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ITEP Work in Action April 3, 2017 Kentucky Center for Economic Policy: Undocumented Immigrants Contribute $37 Million Toward Investments in Kentucky Each Year
Undocumented immigrants living in Kentucky pay $36.6 million in state and local taxes each year, according to a new report from the Institute on Taxation and Economic Policy. These substantial… -
ITEP Work in Action March 23, 2017 Kentucky Center for Economic Policy: Tiny Fraction of Wealthiest Kentuckians Gain from Tax Cuts in Health Repeal
The House plan to repeal healthcare reform, known as the American Health Care Act (AHCA), provides a tax cut to the wealthiest people while reducing the number of Americans with health… -
ITEP Work in Action February 21, 2017 Kentucky Center for Economic Policy: The Math Behind Ed Choice Tax Credit Fails Many Tests
Today in the House Education Committee legislators are hearing discussion of House Bill 162, a proposal to create a so-called Education Choice tax credit in Kentucky. This proposal does not… -
ITEP Work in Action February 1, 2017 Kentucky Center for Economic Policy: Refugees, Immigrants Important to Kentucky and the Economy: An Overview of the Research
From the promise to build a wall paid for by tariffs on Mexican imports and uncertainty about what will happen to DACA (which allows undocumented immigrants whose parents brought them…