Despite positive elements, plan fails to improve tax competitiveness
Washington, D.C. (Mar. 10, 2014)—On February 4, Governor Steve Beshear (D) of Kentucky proposed a tax reform plan which draws from recommendations made by a 2012 tax reform commission. The proposal contains some positive elements, but according to a new report from the nonpartisan Tax Foundation, the overall plan contains problematic components and neglects basic reforms to modernize the state’s tax code.
Key findings include:
“As it stands, Governor Beshear’s plan doesn’t meaningfully make Kentucky’s tax code any more competitive, but instead just shuffles around a bit who bears the increasing cost of state government,” said Tax Foundation economist Lyman Stone.
The drastic increases in cigarette taxes and new taxes on business inputs undermine any positive effects of the modest improvements in income and property taxes this tax plan may have yielded.
Kentucky falls in the middle of the pack in terms of business tax competitiveness, ranking 27th on the Tax Foundation’s 2014 State Business Tax Climate Index.
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