Bevin: 'Everything on the table' for Kentucky tax changes after GOP gets control
A day after voters put Republicans in complete control of state government, Gov. Matt Bevin said he wants big changes to Kentucky’s tax code – but he cautioned against implementing those changes too fast.
LOUISVILLE, Ky. (WDRB) -- A day after voters put Republicans in complete control of state government, Gov. Matt Bevin said he wants big changes to Kentucky’s tax code – but he cautioned against implementing those changes too fast.
“Ultimately I would love to us be more of a consumption-based tax economy and less of a production-based tax economy,” Bevin said in an interview with WDRB News. “And yet, you can’t just flip one switch on and the other off.”
Consumption taxes -- like Kentucky’s 6 percent sales tax – are applied when consumers or businesses make decisions to purchase things. Production taxes – like the state’s income tax – take small bites out of wages or business profits.
Earlier in the day, Bevin said he would be open to eliminating Kentucky’s income tax, according to the Associated Press.
At the same time, Bevin said the changes must be implemented in such a way that the state would not face a big budget shortfall in the transition.
“We can’t, given our financial straits already, afford to make a mistake there,” he said. “So we need to do things by degradation, we need to do things thoughtfully.”
Bevin declined to be specific about the changes he wants, saying “everything is on the table” – even some 300 tax “loopholes” like the state’s deductions for mortgage interest and charitable giving.
He wouldn’t rule out changes to city and county taxes, like the paycheck taxes charged by Louisville Metro, but said the state would have to find ways to generate other revenues for local governments.
“My overall intent is to see the effective tax burden come down while potentially deriving even more revenue,” Bevin said. “I truly think we will be able to derive more revenue by having a more thoughtful and fair and understandable and simple tax code.”
Bevin did identify two taxes that he wants to eliminate: the state’s inheritance tax – which he said encourages wealthy residents to move to Florida – and the state’s property tax on business inventories.
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