There are three main principles we should think about when considering how our tax code provides revenue for vital investments in our state:
In Kentucky’s case, the answer to all three of these questions is ‘no.’
We’ve already taken a look at adequacy. In this post, we’ll take a look at why our tax code is unsustainable and why a recent tax law has made it even less so.
Unsustainable tax codes come about for two reasons — too many special interest tax breaks that grow in size over time, and an over reliance on slow-growing revenue sources. Even though the 2018 tax changes cleaned up some of these special interest tax breaks, many remain, and the new tax code shifts away from faster-growing income taxes towards slower-growing sales taxes and declining cigarette taxes.