On April 10, the Herald-Leader editorial board criticized the tax plan passed by Kentucky’s legislature, claiming it sets the state up for future budget crises and shifts the tax burden to low-income taxpayers.
There are a few problems with these arguments. The board wrote that “by relying less on faster-growing incomes taxes and more on sales taxes, it also guarantees recurring budget crises.” In fact, sales taxes are a more stable revenue source than income taxes. Expanding the tax to include services would have increased its stability, making budget planning easier.
The piece implies the sales tax expansion will disproportionately harm low-income Kentuckians. This plan taxes only a select number of services, including country clubs and limousine services. It’s hard to imagine that anyone other than high-income Kentuckians bear the burden of a tax on a limousine ride for a round of golf at the country club.
Tax Foundation policy analyst