ITEP Work in Action
Kentucky Center for Economic Policy: Local Sales Tax Amendment Could Lead to Wider Inequality Without Better Funding Local Services
November 17, 2023
Under Kentucky’s constitution, there are limits on the types of taxes the General Assembly may authorize local governments to levy, and local sales taxes are not allowed. The 2024 General Assembly may take the first step toward changing that if it considers an amendment to the constitution that would grant the legislature broader authority on […]
Kentucky Center for Economic Policy: Reducing the Income Tax Will Weaken the Commonwealth
January 25, 2023
House Bill 1 in the 2022 Kentucky General Assembly is the next step in a legislative effort to phase down and even eliminate Kentucky’s income tax. This policy path is quite likely the most dangerous ever considered in the modern history of the commonwealth. It marches toward elimination of the source of 41% of state […]
Kentucky Center for Economic Policy: 10 Ways the Kentucky General Assembly Can Advance Race Equity and Shared Prosperity
February 15, 2021
HB 356, sponsored by Rep. Lisa Willner, would go a significant way toward cleaning up Kentucky’s tax code of the many tax breaks that benefit wealthy, predominately white Kentuckians — and would raise over $1 billion in needed revenue annually to invest in equitable and prosperous Kentucky communities. Currently, the state’s tax system plays an […]
Kentucky Center for Economic Policy: Tax Plan Would Fix Kentucky’s Budget Challenges by Addressing Upside Down Tax Code
February 13, 2020
Kentucky’s current tax system lets those with the greatest ability to pay taxes contribute the least as a share of their income. A study by the Institute on Taxation and Economic Policy shows that low- and middle-income people pay between 9.5% and 11.1% of their income in total state and local taxes, while the top 1% pay […]
Kentucky Center for Economic Policy: New Report Shows Kentucky’s Tax System Worsens Income Inequality
October 18, 2018
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.
Message-Inquirer: Tax Study Explores ‘Who Pays?’ in Kentucky
October 18, 2018
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.
Kentucky Center for Economic Policy: New Report: Wealthiest Kentuckians Pay the Lowest Tax Rate and the Problem Is Worsening
October 17, 2018
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…
Kentucky Center for Economic Policy: Clean Up the Tax Code to Invest in Our Commonwealth
August 22, 2018
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 should still be taxed at 5 percent, between that point and $75,000 single/$150,000 married at 6 percent and above those incomes at 7 percent, phasing […]
Kentucky Center for Economic Policy: New Tax Law Shifts from the Wealthy to Kentuckians of Color and Economically Distressed Regions of State
April 20, 2018
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.
The Chronicle: Value Teachers, Unions to Better Education
April 16, 2018
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.
Washington Post: Kentucky’s Tax Cut for the Top 5 Percent Survives Despite Governor’s Veto
April 13, 2018
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.
CNN: Kentucky Governor Signs Controversial Pension Bill as Teachers Call for Rally
April 11, 2018
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.
Courier Journal: Kentucky Tax Reform Bill is a Break for the Rich but a Hike for Everybody Else, Study Says
April 6, 2018
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.
WUKY: A Tale Of Two Tax Studies
April 6, 2018
"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.
Lexington Herald Ledger: Study: GOP Bill Cuts Taxes for the Rich, Raises Taxes for 95 Percent of Kentuckians
April 5, 2018
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.
Washington Post: Kentucky Legislators Send Tax Cuts for Wealthy, Tax Hikes for the Other 95 Percent to Governor’s Desk
April 5, 2018
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.
Kentucky Center for Economic Policy: House Bill 366 Represents a Tax Shift Away from the Wealthy to Low- and Middle-Income Kentuckians
April 4, 2018
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.
Kentucky Center for Economic Policy: Tax Plan Is a Tax Shift with Troubling Long-Term Effect on Revenues
April 2, 2018
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 estimate is that it would bring $248 million more in net revenue by the second year, the plan relies heavily on a fading source in […]
Kentucky Center for Economic Policy: Passage of the Dream Act Would Benefit Kentucky
December 21, 2017
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 excise taxes, property taxes and income taxes. Their effective tax rate of 9.1 percent is higher than that paid by the wealthiest 1 percent of […]
Senate Tax Plan Harms Low- and Middle-Income Kentuckians to Pay for Giveaways to Those at the Top
November 21, 2017
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.
Kentucky Center for Economic Policy: Trump Tax Plan Would Be a Windfall for Only the Wealthiest Kentuckians
July 21, 2017
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 and Economic Policy (ITEP). But as a poor state the tax cuts — coupled as they are with huge federal budget cuts to programs and […]
Kentucky Center for Economic Policy: Troubling Hints About Direction for Tax Reform
June 8, 2017
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.
Kentucky Center for Economic Policy: Any Way You Slice It, A Shift To Consumption Taxes Will Hurt Kentucky
May 22, 2017
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 the current 6 percent rate and by far the highest state sales tax rate in the country (next highest is California at 7.5 percent). But […]
Kentucky Center for Economic Policy: What Good Tax Reform Looks Like
April 17, 2017
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. To further help with inequities, the bill would create a state level Earned Income Tax Credit (EITC) – an effective poverty-fighting tool that supports work […]
Kentucky Center for Economic Policy: Taxing Groceries in Kentucky Would Hurt Low-Income Families, Weaken Revenue Growth
April 12, 2017
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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