Stumbo backs plan to broaden sales tax, eliminate corporate income tax
05/26/2011 07:52 AM
Democratic House Speaker Greg Stumbo said he wants to see Kentucky lawmakers eliminate the exemptions to the sales tax — except those on food and medicine — in order to lower income taxes.
He said that would mean potentially applying the sales tax to services, from attorneys and accountants to plumbers and roofers, that are currently exempt from the state sales tax.
And Stumbo said Kentucky should, in turn, eliminate the corporate income tax.
“Then let all the interest groups that have carved out all these little exceptions all though the years, come in and make their case,” Stumbo said. (see the 5:15 mark of the clip).
Companies, industries or interest groups would then have to make a compelling case to lawmakers that they should be exempted.
Stumbo said states all across the country are falling behind because they lack the intestinal fortitude to take a hard look at their tax code and make progressive changes.
“Tax modernization means that somebody’s going to pay more and somebody’s going to pay less,” Stumbo said. (see the 4:45 mark of the clip)
Republican Senate President David Williams has also advocated for eliminating the corporate income tax and looking at broadening the sales tax.
But Stumbo said 2012 might not be the best time to take up the issue as lawmakers must wrestle over crafting a new two-year budget.
Stumbo said he hopes to fund some capital projects like new school buildings in areas where they need to be replaced.
“I hope that we’ll be able to get back into the idea that we had in 2010, of creating Kentucky jobs for Kentucky families,” Stumbo said. (see the 1:00 mark of the video)
That was part of the House Democrats platform in 2010. Stumbo said the House backed a program that would have created jobs by funding the rebuilding of the most rundown school buildings. He acknowledged it would have added to Kentucky’s debt. Stumbo said the worst schools — those rated as category five schools — got funding to get replaced in 2010.
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