Commonwealth Policy Center
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Tax Day was yesterday, and many of us felt the sting of high taxes. But help is on the way as the Kentucky legislature is putting the Commonwealth on a path to possibly eliminating the state income tax altogether. States that have vibrant economies have moved away from taxing productivity and moved towards taxing consumption. And the commonwealth competes with these states. HB 8 increases taxes on sales and services and, when certain conditions are met, it triggers incremental drops in the state’s personal income tax rates. The first decrease of a half percentage point could be seen as early as January 1 of next year. Practically, this could result in $500-$1,000 a year savings in a person’s income tax.