Tax Code Changes in Kentucky – Is It Time?

In listening to Glenn Beck, heard daily on 1490 WOMI, I hear him brag and brag about living in Texas now where there is no state income tax. What he never mentions is there is a huge tax on food, something we don't have in Kentucky. While it won't touch the food tax,  Govenor Steve Beshear is presenting some Tax Code changes to the Kentucky legislature that they will review tomorrow. State House budget chairman Rick Rand calls the plan  a "starting point."

Tomorrow, the plan will get its first hearing.

Some, like economic policy analyst Jason Bailey of the Kentucky Center for Economic Policy, says it's millions of dollars short of what was proposed by Beshear's tax-reform commission.

The Governor said, "... it's a beginning point... fair and equitable to everybody."

He wants a change from a goods-based to a service-based economy.

"Our tax base is eroding every day," the Governor warns. "And, so we're proposing to expand the sales tax, not raise the rate, but expand the sales tax to a limited number of services in our economy."

Greg Stotelmye at Kentucky News Connection points out, "For instance, when you take your car in for repairs you are currently taxed on the parts, but not the labor. Both would be taxed under a modernized tax code. Other examples are adding sales tax to landscaping, janitorial and laundry services".

The task force had recommended higher-income people should claim less on their taxes, with a cap of itemized deductions at $17,500. That would have brought in 350 million more a year.