Kentucky Center for Economic Policy: State EITC Would Make a Regressive Tax System Fairer
ITEP Work in ActionPrevious posts have described how a state Earned Income Tax Credit (EITC) would help working low-income Kentuckians make ends meet and reach every corner of the state. A state EITC would also make the tax system fairer, as shown in a new report by the Institute on Taxation and Economic Policy (ITEP).
Kentucky’s tax system has a lot of room for improvement in the area of fairness. Low- and middle-income Kentuckians pay a greater share of their incomes in state and local taxes than those at the top. For instance, Kentuckians with the lowest incomes—under $15,000—pay 9.1 percent of their incomes in taxes while the top 1 percent of earners in the state—with an average income of $759,000—pay just 5.7 percent.