Economic group says eliminating Kentucky's corporate taxes wouldn't be very beneficial to the state
06/24/2011 02:55 PM
Eliminating the corporate income tax would not be beneficial to the state, despite legislative leaders saying it would be, one economic group is saying.
Jason Bailey, the executive director of the Kentucky Center for Economic Policy, released a report last week saying eliminating that tax wouldn’t bring more businesses to Kentucky. Democratic House Speaker Greg Stumbo and Republican Senate President David Williams have said previously on Pure Politics that they favor such a measure.
With Kentucky’s corporate income tax around six percent, Bailey said that represents a little less than a quarter of one percent of the cost on doing business in Kentucky.
“It’s a very small part of the cost of doing business,” Bailey said on Pure Politics.
The reduction of the tax percentage, from 12 percent down to six, actually reduced the revenue potential of the corporate income tax for the state, Bailey said.
“There are reasons to be concerned about how the deterioration of the corporate income tax or cutting it would actually deliver economic gains,” Bailey said.
Loopholes in the corporate income tax codes also provide a loss of revenue, he said. Closing those loopholes would allow Kentucky businesses to be on the same playing field as national corporations who can avoid Kentucky’s corporate taxes.
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