Kentucky’s legislative leaders have made reducing the state’s individual income tax rate their top priority in recent years. Lawmakers have repeatedly acted on that, reducing the rate several times and costing the state billions annually that could have been invested in kids and families.
Despite that cost, only 9% of Kentuckians say those cuts are helping them personally, according to a new poll of more than 2,000 Kentuckians conducted by national pollster Change Research. In contrast, 8% say the tax cuts have actually hurt, 40% say they haven’t affected them at all and 43% say they are not sure.
Another cut goes into effect on January 1, dropping the rate to 3.5%. Kentucky’s income tax rate was 5% as recently as 2022. That 30% cut comes at an enormous cost to the state, reducing revenue by $2.1 billion annually. That’s more than Kentucky spends on base funding for its K-12 schools.
“Efforts to eliminate Kentucky’s income tax are costing the state billions and preventing vital public investments that would benefit everyone and truly bring down the cost of living,” said KyPolicy Executive Director Jason Bailey. “Shouldn’t more than 9% of Kentuckians say they are better off as a result?”
A look at who has benefited from income tax cuts reveals why support for them is so low. An estimated 67% of state income tax cuts go to the wealthiest 20% of Kentuckians, according to analysis by the Institute on Taxation and Economic Policy. More go to richest 1%, who make $1.6 million a year on average, than the bottom 60%, who earn $52,000 a year and below.
The Change Research poll, which surveyed a random sample of 2,079 Kentuckians with a margin of error of +/- 2.2%, also asked whether tax cuts should be the legislature’s biggest concern. Only 28% of respondents said lawmakers should focus on “reducing taxes for everyone, even if most of the benefits go to the wealthy,” while 72% said legislators should focus instead on “improving schools, improving healthcare, and bringing down the cost of living.”
And the poll shows people want legislators to go further. Kentuckians overwhelmingly support raising taxes on the wealthy to fund vital public investments, with 67% of respondents supporting a Settle Up Tax on the wealthiest 5% to help improve schools, health care and other public services.
“These results suggest a need to rethink legislative priorities,” Bailey said. “Expensive tax cuts skewed to the wealthy aren’t helping workers and families get by. Kentuckians want real action on affordability and greater support for basic services like schools and health care. And they want lawmakers to tax the wealthy more to make that possible.”
