FRANKFORT — Advocates for modernization and fairness in Kentucky’s tax system filed a tax reform measure today for consideration by the Kentucky General Assembly.
“We’ve worked together on a comprehensive measure that would replace our outdated tax system with one that is designed for today’s economy and today’s needs,” said Rep. Jim Wayne, D-Louisville. “This plan is the answer to Gov. Bevin’s call for a tax reform plan that will move our state forward. We appreciate the bold leadership the governor showed when he promised to call a special legislative session on this issue. We look forward to working with him and all members of the Kentucky General Assembly to ensure that our state, at last, is prepared to meet the current and future needs of its citizens.”
The tax reform plan, Bill Request 15, would close loopholes for the wealthy and some corporations, while lowering taxes for most middle-class families. Although some taxes would rise, those increases would be focused on luxury goods and services that only the wealthy can afford. Sponsors of the legislation say it is aimed at promoting fairness while building a revenue base designed for a 21st Century economy.
Under the proposal, an increased state cigarette tax would generate about $155 million in new revenue. A proposed state earned income tax credit would help lower the annual tax burden for hard-working, low-wage citizens. The sales tax on certain services used primarily by the wealthy, such as chauffeured limousine rides, would be implemented to generate an additional $104 million annually.
The tax reform proposal also includes measures to:
· Cap individual income tax itemized deductions.
· Balance the tax disparity between the wealthy and low-wage workers by a modest income tax increase on top earners.
· Repeal the distilled spirits case sales tax.
· Apply sales tax and transient room taxes to total hotel accommodation price.
· Freeze the state real property tax rate.
Numerous groups have studied tax reform plans in Kentucky over the past 25 years, most notably the 2012 Blue Ribbon Commission on Tax Reform. The plan unveiled today includes many of the top recommendations tax experts have proposed to modernize Kentucky’s system.
“Revenue shortages combined with our state’s pension crisis have brought our state to the edge of a cliff,” Wayne said. “We have a plan that has been carefully vetted and designed by experts to move our state forward. If lawmakers are bold and support a progressive tax plan that provides for Kentucky’s needs we will be able to look forward to quality-of-life improvements for all people throughout the Commonwealth.”
The plan is endorsed by the following state legislators: Rep. Jim Wayne, Rep. Tom Burch, Rep. Attica Scott, Rep. Kelly Flood, Rep. Reginald Meeks, Rep. George Brown Jr., Rep. Mary Lou Marzian and Rep. Joni Jenkins.