KY Policy Blog

What Are Taxes For?

By Anna Baumann
April 18, 2016

Since completing forms and mailing off checks may not inspire reflection on the bigger purpose of taxes, here’s a Tax Day reminder of what we are chipping in for:

Through our local, state and federal governments, our tax dollars are pooled together and invested in schools and universities, roads and bridges, social services for vulnerable children and adults and other public services essential for shared prosperity and thriving communities in the Commonwealth.

In other words, taxes are a critical tool for doing important things together we cannot do alone. Here read more

Undocumented Immigrants in Kentucky Pay $37 million in State and Local Taxes, Would Increase with Legal Status

By Anna Baumann
February 24, 2016

Undocumented immigrants contribute to the Kentucky communities in which they live and work in a number of ways, including through taxes. Because immigration reform would provide a pathway for full compliance with tax laws — as well as improve immigrants’ ability to earn financial and human capital — it would also increase the taxes they pay.

A new report from the Institute on Taxation and Economic Policy estimates the 45,000 undocumented immigrants living in Kentucky today pay $37 million every year in state and local taxes — at an effective read more

The Low-Income Kentucky Workers Who Would be Harmed by a Federal Tax Credit Cut

By Ashley Spalding
September 3, 2015

The federal Earned Income Tax Credit (EITC) and refundable Child Tax Credit (CTC) help hundreds of thousands of low-income working Kentuckians make ends meet. These tax credits have been shown to reduce poverty and encourage employment. Children of recipients are more likely to be healthier, do better in school, go to college and gain employment as adults.

Unfortunately key provisions of the EITC and CTC are scheduled to expire at the end of 2017, which will result in a cut in these tax credits unless federal policymakers act to save read more

The Safety Net Is Effective at Fighting Poverty in Kentucky, Should Be Protected

By Anna Baumann
May 26, 2015

More than 800,000 Kentuckians are lifted out of poverty each year by safety net programs including Social Security, SNAP (formerly food stamps) and low-income tax credits for working families according to recent research from the Center on Budget and Policy Priorities (CBPP). Of those 809,000, nearly one in four are children.

It’s a larger impact than was previously thought. New data from the Urban Institute takes underreporting of certain benefits into account to show just how many people the safety net serves (underreporting occurs when, for instance, someone forgets or read more

Working Family Tax Credits Support Kentucky Moms and Kids

By Anna Baumann
May 8, 2015

Mother’s Day is a fitting time to celebrate the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), two working family programs that help 296,000 Kentucky mothers make ends meet and invest in the long-term well-being of their children.

The EITC is a federal tax credit for low- and moderate-income working families and individuals that increases in size with earnings up to a certain threshold, then phases out. Families with more children qualify for a larger credit. Similarly, the CTC provides a tax credit of up to $1,000 per read more

April 15 Isn’t Popular, But Taxes Still Important

By Anna Baumann
April 14, 2015

Few people like Tax Day. Filling out forms and mailing off checks doesn’t usually inspire reflection on the bigger purpose of taxes.

Yet most people can agree on the priorities our tax dollars pay for. With them — and through our local, state and federal governments — we invest in good schools and universities, well-kept roads and bridges, social services for vulnerable children and adults, safe and beautiful communities and other public structures essential for shared prosperity in the Commonwealth.

In other words, taxes are a critical tool for doing read more

Kentucky a Loser in Proposed Tax Giveaway to Wealthiest

By Jason Bailey
April 13, 2015

The U. S. House of Representatives is expected to vote this week to repeal the federal estate tax, an idea that would worsen growing inequality and reduce revenue needed for investments that move our economy forward. As a poor state, Kentucky is an especially big loser in this proposal.

Contrary to the impression given by those clamoring for repeal, only the wealthiest 0.2 percent of estates face the estate tax. Kentucky is expected to have only about 40 estates owing the tax in 2016, or 0.7 percent of taxable estates read more

Kentucky Must Reject Deeply Dangerous Call for Constitutional Convention

By Jason Bailey
February 14, 2015

A proposal that could throw the country into chaos and jeopardize the U. S. Constitution is being pushed in states across the country this year, and in the Kentucky legislature as of Friday.

A growing number of states have petitioned Congress for a constitutional convention on a balanced budget amendment, and more legislatures are looking at the issue this year. Kentucky Senate President Robert Stivers filed the state’s version as Senate Joint Resolution 132.

If 34 states pass resolutions like SJR 132, Congress must call a convention under Article V read more

Two Pillars of Making Work Pay: Minimum Wage Increase and a State Earned Income Tax Credit

By Ashley Spalding
September 3, 2014

Increasing the state minimum wage and instituting a state Earned Income Tax Credit (EITC) and are two policies that complement each other and can help working families better make ends meet, as outlined in a new Center on Budget and Policy Priorities (CBPP) report. In combination, these policies (which we have previously promoted for Kentucky here and here) boost income, widen the path out of poverty and reduce income inequality.

As described in our recent report The State of Working Kentucky 2014, Kentucky families have experienced an erosion of wages read more

Congressional Vote on Internet Tax Loopholes Could Help or Harm Kentucky’s Budget

By Jason Bailey
September 3, 2014

The Senate is expected to vote soon on continuing a moratorium on state and local taxes of Internet access, and the specifics of what passes could mean hundreds of millions of dollars gained or lost to Kentucky’s state budget.

The moratorium, known as the Internet Tax Freedom Act (ITFA), passed originally in 1998, has been extended several times since then and is set to expire again on November 1. ITFA bars states from imposing sales taxes and telecommunications excise taxes on the fees paid by households and businesses for wired read more