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1 Joseph Henchman, Kentucky Tax Reform Commission Offers Disappointing Grab Bag 1 (2012)

handle is hein.taxfoundation/ffdeixz0001 and id is 1 raw text is: TAX December 27, 2012 No. 348 Kentucky Tax Reform Commission Offers Disappointing Grab Bag By Joseph Henchman Introduction Last week, Kentucky's Blue Ribbon Commission on Tax Reform released their final report.1 The 23-member group, summoned by Gov. Steve Beshear (D) and the twelfth such tax reform study group since 1982, set out to determine how the state tax system could be made more fair, more competitive, more simple, more elastic (grow with the economy), and more adequate (support state services). If fully enacted, the changes would increase state revenue by $646 million per year. Some of the recommendations are timely and should be implemented, but overall, the report offers a grab-bag of provisions with little central theme. Taken together, the recommendations would raise income and excise taxes, reduce corporate taxes (primarily for select in-state businesses), and maintain a costly business property tax system with few changes. The merits and implications of this approach are not explained in the report let alone defended as the right policy. Their recommendations for each tax area are listed and analyzed in the following tables. Individual Income Tax Table I: Individual Income Tax Recommendations Modestly reduce rates on income over $4,000 (see Table 2). -$219 million Cap itemized deductions at $17,500. +$350 million Linlk the state tax code to the federal tax code as of December 31I, 2012 (rather -$26 million than December 31I, 2006), reducing differences between the two codes. Cumulative +$470 million 1 See Report by the Blue Ribbon Commission on Tax Reform to Governor Steve Beshear (Dec. 17, 2012), httap//:Itgovrnorkygov/taxreform/Documents/Re1ort/TIaxIoeformCommissi onRelortFina .df.

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