Kentucky Center for Economic Policy: Kentucky’s Income Tax: Protecting and Strengthening a Key to Growth
ITEP Work in Action“The state individual income tax is essential to economic growth and quality of life in Kentucky and should be protected – even strengthened – as part of any tax reform package. It is the largest and most effective tool the state has to generate resources for crucial investments in schools, health care and other key services. It not only provides a huge portion of current revenues but is also more effective than other taxes at generating, over time, the revenues needed to keep pace with Kentucky’s needs.
Additionally, the state income tax is the only major tax in Kentucky based on a person’s ability to pay. It therefore plays a key role in making the tax system fairer. Claims that income taxes hinder state economic growth are inaccurate; on the contrary, the investments that the income tax makes possible are vital for job creation.
Kentucky should defend its income tax and improve it by closing loopholes, adjusting the brackets and rates to ensure that everyone pays their fair share, and introducing an earned income tax credit.”