Amid talk of state income tax cuts, experts say Kentucky’s tax code reforms should instead focus on eliminating tax breaks for the wealthy and businesses.
the Kentucky Chamber of Commerce and other proponents of income tax abolition say it’s a necessary step to keep businesses.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, pointed out that income tax revenues are critical to ensuring the quality of schools, health care, roads and other public investments that affect the quality of life. Instead, he thinks the state should focus on closing the loopholes and eliminating tax breaks for top earners.
“When we clean up the tax code by asking those at the top to contribute and pay what they owe, we are able to invest in things like early childhood education, which we know, pays off in the short and long term for families and the economy,” Bailey argued.
He pointed out that over the past decade, Kentucky has continued to extend tax breaks to businesses that, in some cases, completely exempt them from paying corporate taxes. More recently, in 2019, lawmakers passed a slew of bills reduce corporate taxes.
Bailey noted that sales and use taxes do not replace income tax, as sales tax increases drain a much larger share of family budgets from working-class Kentuckians and low-income households. revenue.
“So it just shifts the responsibility of paying for these things onto people who are already struggling to make ends meet,” Bailey claimed. “It’s not sustainable for the revenue stream, and it’s not fair.”
Bailey also pointed to the state’s current budget surplus, with billions of additional dollars he hopes will be spent on community resources.
“And we’ve had 20 rounds of budget cuts since 2008, and this is our opportunity to reinvest,” Bailey said. “But there’s the potential that we’re giving that away, you know, wasting it, in tax cuts for people at the top.”
A 2020 study of the Institute on Taxation and Economic Policy found that low- and middle-income Kentucky residents pay between 9.5% and 11.1% of their income in state and local taxes, while people with incomes in the top 1% pay 6 .7%.
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Asian American leaders in Minnesota say some community members are still struggling to recover from economic slides during the pandemic. They hope that the state will give them a hand and make these populations feel less invisible.
How to use the state’s historic budget surplus was key in this year’s legislative session. As the additional spending bills take shape, a disposition would mean $1 million for the Coalition of Asian American Leaders. Nick Kor, senior director of the movement-building group, said he would distribute the funds to struggling businesses and nonprofits.
“A million dollars, all in all, isn’t that much money, when you think about it,” he said, “and so we think that can be a start for us.”
Kor said it would be a break from years of disinvestment in their communities, adding that the situation has been made worse by anti-Asian hatred. In a recent CAAL survey, 43% of Asian American small businesses said they were unable to pay their bills during the crisis. However, the leaders of the State House and Senate disagree on most of the spending, which creates uncertainty for this provision.
Despite being one of the fastest growing populations in the state with significant purchasing power, the coalition pointed to wide economic gaps among Asian American subgroups. For struggling businesses, Kor said, the investment could help overcome the hurdles.
“Often,” he said, “these small businesses don’t have the capacity, background or experience to navigate government systems.”
John Yang, who chairs the Minnesota Hmong Chamber of Commercesaid seeing businesses forced to close would be devastating to their communities and the culturally specific options they rely on.
“The access that the community needs would be harder to come by,” he said, “and they might have to travel further; they might have to buy out of state.”
Funds could also be used by communities to clean up or make repairs following a hate-motivated incident.
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Frontline workers in Minnesota are getting a ‘thank you’ from the state in the form of pandemic bounty checks. Over the next month, eligible people will be able to apply for the one-time payments.
On Monday, Gov. Tim Walz hosted a ceremony to endorse the plan. $500 million will be shared among more than 650,000 people, including healthcare workers, corrections officers, grocery store workers and other essential workers.
They should receive $750 each. Brian MacNeill is a behavior analyst at Minnesota Veterans Home in Minneapolis.
He said it was very difficult at the start of the crisis.
“Protective gear wasn’t as readily available,” MacNeill said. “We came to work with cloth masks. We didn’t have eye protection yet.”
He said his team strives to provide one-on-one care to veterans. This led to additional stress about the possibility of making them sick while the staff were carrying out their mission.
The deal also replenishes the state unemployment insurance fund. A final plan was put on hold due to disagreements in the Legislative Assembly over the amount of bonus checks, as well as which workers should be eligible.
The state is working with a vendor to establish an online portal for eligible workers to apply. Meanwhile, MacNiell — who is also a member of the Professional Employees Association of Minnesota — said it was amazing to see the recognition come to fruition.
“It took so many people to keep this state open, to keep it going,” MacNeill said, “even to bring it to the surplus that we now face and have as a state of Minnesota.”
Heading into the current legislative session, Minnesota had forecast a $9 billion surplus.
With respect to bonus checks, income caps and other forms of verification will be required for workers to receive payments.
They are advised to monitor the details on a state website – frontlinepay.mn.gov – for updates on when they can apply. Officials say it could take a few months for the checks to arrive.
Disclosure: The Professional Employees Association of Minnesota contributes to our fund for reporting on policy and budget priorities, living wages/working families, social justice. If you would like to help support news in the public interest, click here.
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As the Missouri Senate considers a proposal for economic aid payments passed by the House, advocates for working families are urging lawmakers to ensure all Missourians are included.
The Bill before the Legislative Assembly would provide a tax refund of up to $500 for individuals and $1,000 for married couples filing jointly, depending on the income tax they owe.
Traci Gleason, vice president of external relations for the Missouri Budget Project, pointed out that one-third of Show Me State residents earn so little that they owe no income tax – which means that they would be excluded from receiving these payments.
“Missourians have the hardest time making ends meet,” Gleason said, “and also pay a higher proportion of their income in state and local taxes than other income groups.” .
She said many families may expect to receive the full $500 or $1,000, but that will only go to those who have that much tax to pay. This means that some households will only receive part of this amount.
Gleason added that as the costs of food, gas and other necessities rise, residents are paying more in sales and excise taxes — even those who don’t owe income tax. .
She noted that this tax credit is meant to help fight inflation and that making the payments refundable is an option to include everyone.
“By making the tax credit refundable,” Gleason said, “we can ensure that those who are struggling the most to afford gas and put food on the table also see some economic relief. .”
According to the United States Department of Agricultureoverall food prices increased by 8% between March 2021 and March 2022. Meat, poultry and fish increased by almost 14%, and fruits and vegetables increased by 8.5%.
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