KY General Assembly gives final approval to income tax reduction
The Kentucky Senate has voted 30 to five to lower the state’s income tax rate from 4.5% to 4%, starting next year. Senate Budget Committee Chair Chris McDaniel said tax policy is a key lever for economic development in Kentucky. Speaking against the tax reduction, Lexington Senator Reggie Thomas said the lower rate would benefit the wealthy more while new taxes on certain services will hit the poor harder.
“Why we want to engage in this reverse Robinhood mentality confounds me, we want to take from the poor and give to the rich. It makes no sense at all,” said Thomas.
Louisville Senator David Yates called the legislation tax restructuring and not a tax cut with an income tax reduction and a new tax on some services.
Leitchfield Senator Stephen Meredith said about 50% of Kentuckians are exempted from income taxes. He said the working families of the Commonwealth are paying the highest amount. Supporters say a move to more sales tax leaves the decision about spending in the hands of the taxpayer.
Senate Majority Floor Leader Damon Thayer said working Kentuckians deserve to have more money in their pockets.
“We’ve got one of the worst workforce participation rates in the country. So, I say to the people that do get up and go to work every day, and pay those income taxes, this is for you,” said Thayer.
The bill, which has passed both chambers of the legislature, goes on to the governor for his consideration.
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