Study: Middle-income earners shoulder highest tax burden in Kent - WDRB 41 Louisville News

Study: Middle-income earners shoulder highest tax burden in Kentucky

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Source: Institute on Taxation and Economic Policy Source: Institute on Taxation and Economic Policy
LOUISVILLE, Ky. (WDRB) -- Kentucky families earning $30,000 to $50,000 a year pay the highest share of their incomes in state and local taxes -- 10.8 percent -- while families earning $330,000 or more pay only 6 percent, according to an analysis by two organizations that favor progressive policies.

Kentucky's tax policies are far from the nation's most "regressive" -- meaning the poor pay more as a percentage of their income, according to the Kentucky Center for Economic Policy and the Institute on Taxation and Economic Policy.

The groups said Kentucky's income tax, which is about 5 percent for both middle- and top-income families, is one of the state's more progressive policies, while the state sales tax of 6 percent hits lower-income residents harder even despite exemptions for food, prescription drugs and utilities.

"We'd be in a lot worse shape, both in terms of fairness and the resources we have to invest in education and health, if it weren't for our income tax,” said Jason Bailey, director the Kentucky Center for Economic Policy, in a news release. “Some in Kentucky would like to chip away at income taxes rather than protect them, but the huge recent budget shortfalls and tax shifts away from the wealthy in states like North Carolina and Kansas are showing us just what a bad idea that is.”

Indiana is among the ten most regressive state tax systems because of its low, flat-rate income tax, according to the report.

The study excludes people over 65 because the authors wanted to look at how states treat the majority of their residents without various exemptions and special breaks for the elderly clouding the picture, Bailey said.

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