Ky's tax structure gives companies an "8.25% reason" to go elsewhere, Chamber's President says
09/20/2012 05:36 PM
As the blue ribbon task force looking at the state tax code gets down to crafting their recommendations for reform, business leaders are hoping for reductions in some income tax rates and are open to ending some specific tax breaks.
Kentucky Chamber of Commerce President David Adkisson said the business community hopes that whatever is recommended the tax commission, which was created by Gov. Steve Beshear this year, it will be revenue neutral.
“We would hate to see an over-reaction of well state government had to cut and cut and cut so we must need more taxes, we see that as a knee jerk reaction coming out of this recession which is ill timed and not good for the state” (at 2:15).
The commission this week received its report from the consultants working with the group that outlined Kentucky’s current tax system, including it’s flaws and how it stacks up to other states. The group of business leaders and social and education advocates must submit their recommendations for change to the tax code by mid-November.
Adkisson said Kentucky must compete against states like neighboring Tennessee, which does not have a personal income tax. Kentucky has a top personal income tax rate of 6 percent as well as a 2.25 percent occupational tax. But those numbers are at zero in Tennessee, which Adkisson said is hurtful to the business climate of the state.
“The person making the decision whether or not to move that regional head quarters to Louisville versus Nashville us looking at that and saying that’s an 8.25 percent reason for me to go to Nashville” (5:20).
While Adkisson says the Kentucky Chamber does not defend all exemptions in the current tax structure, some exemptions where government could gain the most money by doing away with are simply too popular among Kentuckians.
“The big ones that have the big dollars are things that you and I enjoy as a part of our lifestyles, and most Kentuckians do, and that’s exemptions on our real estate and charitable deductions” (at 8:40).
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