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1 Lyman Stone, Kentucky Tax Plan Fails to Improve Bluegrass State's Tax Competitiveness 1 (2014)

handle is hein.taxfoundation/taxfaau0001 and id is 1 raw text is: TAX RO QKentucky Tax Plan Fails to
FOUNDATION
Improve Bluegrass State's Tax
Mar. 2014     Competitiveness
No. 418
Lyman Stone
Economist
Key Findings
* Despite some positive elements, Governor Beshear's tax proposal
as a whole includes several problematic components and neglects
basic reforms to modernize the state's tax code.
The plan includes a significant reduction of Kentucky's income
tax rates accompanied with some base broadening but does not
include key reforms such as regular inflation adjustments.
Kentucky's combined state-local income tax rates would remain
among the higher tax rates on middle-income households in the
nation.
Proposed changes to the corporate tax continue the erosion of the
state's corporate income tax base through narrow tax incentives,
while offering only a very limited rate cut.
Sales tax changes include an attempt at broadening the base to
include services, but unfortunately includes many business-to-
business services, which can lead to tax pyramiding and harm
the state's business tax climate.
The proposed reduction in alcohol excise taxes is dwarfed by
proposed increases in tobacco taxes, leading to an increased
reliance on a narrow excise tax base.
Positive proposals to phase out inventory and some tangible
personal property taxes would make Kentucky's property tax
code somewhat more competitive.

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