FRANKFORT — A Republican House member who has pushed for an overhaul of the state's tax code said Monday that he will no longer work with a group that is examining the issue in the House.
Rep. Bill Farmer, R-Lexington, said Monday that he decided to leave the group because it appeared that the group was looking at decreasing the state's income tax but not eliminating it. Farmer said in a written statement that he was pulling out because he was concerned that the Democrats were simply going to raise taxes.
"Instead of eliminating either income tax, the Democrats' plan would merely reduce the income tax eight-tenths of a percent, from 5.8 percent to 5 percent," Farmer said in a written statement.
Farmer, the lone Republican in the work group, has filed legislation that would do away with the state's income and corporate income tax but would expand the state's sales taxes to services that are currently not taxed.
Rep. Jim Wayne, D-Louisville, and member of the work group, said Monday that the group has not presented a final product yet. The group is looking at how increasing some taxes and decreasing others would affect revenue.
Wayne said it's unlikely that a complete overhaul of the state's tax code could pass this legislative session, but it's possible that some elements of the plan — including doing away with some tax exemptions — could be used to help plug what could be a $1.5 billion shortfall in the next two-year budget.
It's also possible for the House to look at tax reform after this session is over and pass some of the tax reform measures in January 2012, which would help the second year of the two-year budget, Wayne said.
