David Williams proposes eliminating income tax; opponents dismiss his ideas

Opposing camps dismiss candidate's jobs plan

jbrammer@herald-leader.comSeptember 15, 2011 

FRANKFORT — Republican gubernatorial nominee David Williams wants to eliminate state personal and corporate income taxes as part of his plan to create and retain jobs in Kentucky.

Williams' plan, released Wednesday, also recommends several short-term tax suspensions designed to jump-start Kentucky's job market and several changes in the law, including allowing voters to decide whether their counties should have a right-to-work law, which would allow an employee to opt out of joining a union.

The plan also would allow voters to decide whether their local governments should have to pay the prevailing wage for public works projects.

Williams faces Democratic incumbent Gov. Steve Beshear and independent Gatewood Galbraith in the Nov. 8 general election.

Matt McGrath of the Kentucky Democratic Party dismissed Williams' plan.

"David Williams' shiny plan with fancy photographs isn't worth the paper it's printed on, and it certainly can't hide a quarter-century as a career politician, abusing taxpayer dollars to enrich himself rather than improving the lives of Kentuckians," McGrath said.

Galbraith's running mate, Dea Riley, called Williams' plan "a political statement, not an economic-tax plan."

She said it "does not offer any concrete suggestions as to actual job growth, nor does it include any legitimate analysis as to how his proposal will grow jobs, at what rate or what basis he came to derive his suggestions. Kentuckians should expect more."

Riley said she and Galbraith support tax reform, including the elimination of personal income taxes, but they cannot agree with Williams' tax suggestions or his "attack on worthy regulations established to ensure the health, safety and welfare of Kentucky citizens."

She also said their campaign would release its economic plan next week.

Williams said his economic plan was the first of several issue papers his campaign will release.

He also said Beshear, who has declined to participate in several public forums with Williams, would "not marginalize" Williams in that Williams will head the state Senate next year even if Beshear wins the race for governor.

Williams' campaign said he released his jobs-tax plan on the same day the Bowling Green Chamber of Commerce canceled a forum for gubernatorial candidates because Beshear declined to attend.

Williams did not explicitly say how he would make up for revenue if income taxes are eliminated, but his plan calls for a commission of economic and tax experts to come up with a new state and local tax structure that would receive an up-or-down vote in the legislature.

Williams filed a bill during this year's legislative session to set up such a commission. The Republican-controlled Senate approved the measure, but the Democratic House did not.

The commission would be instructed to eliminate both personal and corporate income taxes that bring in about $3.8 billion a year to the state treasury and to "make Kentucky the best state in the nation to create and retain jobs."

Its work, Williams said, would have to be "revenue neutral," meaning that any tax increase or new taxes would have to be offset equally by a tax decrease.

Williams said the commission's plan would be submitted to the legislature without any changes, "to keep the lobbyists and special interests from diluting the bill."

He also proposed the immediate suspensions of some taxes to help Kentucky's economy. They include:

■ The sales tax on all construction-related purchases by businesses.

■ All taxes on energy used in manufacturing, processing, production, and transportation and distribution businesses.

■ The tax on hay and feed to provide relief to the horse industry.

■ The state's portion of the car tax.

■ The "barrel tax" on the bourbon industry.

To reduce what Williams called "the negative impact that large government bureaucracies can have on job creation," his plan calls for a moratorium on new administrative regulations except for emergencies, a sunset provision for all regulations subject to legislative review, and a provision to make sure no new regulation was more stringent than federal regulation unless the legislature approved otherwise.

Williams also said he would "lead the fight" against health care changes backed by President Barack Obama by ordering the state government to file litigation against them.

Other parts of Williams' plan call for:

■ Protecting Kentucky coal from U.S. Environmental Protection Agency regulations.

■ Repealing the state's moratorium on nuclear power.

■ Creating a "Kentucky Jobs" venture capital fund similar to a program in Ohio in which expert venture capitalists invest in businesses that have a good shot at creating jobs.

■ Setting up a jobs initiative program similar to one in Georgia for workers receiving jobless benefits.

■ Promoting agricultural products in the state and opposing federal "overregulation" of Kentucky farms.

■ Modifying the state's unemployment insurance system by indexing the benefit structure to an average of the surrounding states, or decreasing unemployment insurance benefits.

■ Placing new state workers into a 401(k)-style system to sustain the state's public pension system.

Teachers' pensions would not change, Williams said.

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