Trump isn’t the only one giving tax cuts to the rich. The Repubs in Frankfort are joining him, once again.
House Bill 1 — the slot reserved for the most important bill as decided by the leadership — is this session’s cut to the state income tax rate. The bill cuts the rate from 4% to 3.5% of net income.
Half a percent may not seem like a big deal to you. But remember, we’re dealing with big numbers here, where a small change in one part of a formula can make a huge difference.
In this case, it’s 0.5% times all the net income of everyone in the state.
The result? According to the fiscal note accompanying the bill, this further lowering of the tax rate will cost the state $718 million per year at full implementation. For comparison, that is more than the base funding for our public schools, and much more than we spend supporting our colleges and universities.
And who gets the bulk of this tax cut? The rich. As noted by the KY Center on Economic Policy:
- A person making $30,000 a year would see their tax bill drop by $58.
- Someone making $140,000 a year would get about $500 back.
- But the top 1% of Kentucky tax payers would get a $5,500 tax cut.
So what’s going to happen? HB1 is going to pass, of course. Republicans will celebrate cutting taxes, and run on it in the next election, ignoring the good that could have been done with those millions of dollars. (Child care, anyone?)
As they gleefully pass the bill, they will also be ignoring the warning by Jason Bailey, the director of KY Policy:
“With this next drop, the state will get closer to the level of tax cuts Kansas put in place in 2013 and was forced to reverse just five years later because the state wasn’t bringing in enough money to meet its obligations.”
There was hope that Kentucky Republicans would learn from the Kansas Debacle. Apparently, they did not. And all of us, including even the wealthy, will suffer from the damage this will ultimately do to our state.
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Jason Bailey
