Kentucky
Reality Interrupts the Fever Dream of Income Tax Elimination in Kentucky
June 27, 2024 • By Eli Byerly-Duke
Keeping the Kentucky income tax on a march to zero would mean tax hikes for working families or widespread cuts to education, health care, and other public services. Reversing course is certainly the wiser course of action.
Recent Tax Cuts Have Expanded Inequality in the States
March 11, 2024 • By Jon Whiten
Some states have improved tax equity by raising new revenue from the well-off and creating or expanding refundable tax credits for low- and moderate-income families in recent years. Others, however, have gone the opposite direction, pushing through deep and damaging tax cuts that disproportionately help the rich. Many of these negative developments are quantified in […]
Kentucky: Who Pays? 7th Edition
January 9, 2024 • By ITEP Staff
Kentucky Download PDF All figures and charts show 2024 tax law in Kentucky, presented at 2023 income levels. Senior taxpayers are excluded for reasons detailed in the methodology. Our analysis includes nearly all (99.6 percent) state and local tax revenue collected in Kentucky. These figures depict Kentucky’s flat personal income tax rate of 4 percent. […]
Kentucky Center for Economic Policy: Local Sales Tax Amendment Could Lead to Wider Inequality Without Better Funding Local Services
November 17, 2023 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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: Who Pays? 6th Edition
October 17, 2018 • By ITEP Staff
According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Kentucky has the 25th most unfair state and local tax system in the country. Incomes are more unequal in Kentucky after state and local taxes are collected than before.
Tax Cuts 2.0 – Kentucky
September 26, 2018 • By ITEP Staff
The $2 trillion 2017 Tax Cuts and Jobs Act (TCJA) includes several provisions set to expire at the end of 2025. Now, GOP leaders have introduced a bill informally called “Tax Cuts 2.0” or “Tax Reform 2.0,” which would make the temporary provisions permanent. And they falsely claim that making these provisions permanent will benefit […]
Kentucky Center for Economic Policy: Clean Up the Tax Code to Invest in Our Commonwealth
August 22, 2018 • By ITEP Staff
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 […]
Most States Have Raised Gas Taxes in Recent Years
May 22, 2018 • By Carl Davis
An updated version of this blog was published in April 2019. State tax policy can be a contentious topic, but in recent years there has been a remarkable level of agreement on one tax in particular: the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies.
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By Aidan Davis
"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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 • By ITEP Staff
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 […]
