Grover Norquist: Kentucky is joining the race to eliminate income taxes.

While President Biden and congressional Democrats try to impose tax hikes, a dozen state legislatures are in a race to phase down their state income tax to zero.

Kentucky has now joined the list of states looking to become income-tax free: State Representative Jason Petrie (R) introduced House Bill 8 which reduces income tax rates as revenue increases from economic growth.

Why the nationwide movement to end state income taxes?

For starters, taxpayers in all 50 states have seen the success of the eight states that have no state income tax: Florida, Texas, Tennessee, Nevada, South Dakota, Washington, Wyoming and Alaska. And New Hampshire, which does not tax wage income, will become the ninth “no income tax” state as soon as it completes a five-year phase-out of its tax on interest and dividends income.

Over the last decade, millions of people and jobs have moved out of high-tax states and into low-tax and no-income-tax states. For the second year in a row, the U-Haul Growth Index finds Texas, Tennessee, and Florida – three “no income tax” states – had the greatest net gain of one-way U-Haul trucks in 2021.

“With a strong job market and low cost of living, it’s a no brainer. Texas doesn’t have an income tax, so families get more for their money,” explained U-Haul Company of South Austin president Kristina Ramos.

The tax competition race is underway. Last year, 14 states enacted income tax cuts. This list includes Kentucky’s neighbors Ohio, which reduced its top rate, the part of the income tax that is used to make decisions about investment, from 4.797% to 3.99%, and Missouri, which is phasing its top rate from 5.4% down to 4.8%. North Carolina is moving to a flat income tax rate of 3.99% over the next five years.

That momentum has carried into this year. Nearly a dozen states, including Kentucky’s neighbors West Virginia and Indiana, either already have or are currently working to reduce their income taxes. In Mississippi, for example, House Speaker Philip Gunn’s income tax phase out was approved by the state house by a vote of 107-4. Eliminating the state income tax is also a top priority for Gov. Tate Reeves.

In Iowa, under the leadership of Gov. Kim Reynolds, Senate Majority Leader Jack Whitver, and House Speaker Pat Grassley, Republicans delivered a plan that will move Iowa to a flat rate of 3.9%. Whitver and Senate Ways & Means Chairman Dan Dawson view moving to a low, flat income tax rate as a big step towards their goal of phasing out the state income tax altogether.

Kentucky has a dismal rank of 38th in U-Haul’s report. To become competitive, now is the time for lawmakers to begin reducing and phasing out the state income tax. Its top rate of 5% is currently higher than four of its neighbors – Illinois, Indiana, Ohio, and Tennessee – and will soon be higher than Missouri’s after its 2021 tax cut is fully implemented.

Fortunately, Republican leaders refuse to sit back and allow Kentucky to continue to fall behind. They are committed to using the 2022 legislative session to deliver pro-growth income tax relief. Last week the House of Representatives approved Rep. Petrie’s House Bill 8, which would reduce the state income tax from 5% to 4% in 2023 and then use revenue triggers to responsibly phase out the state income tax completely. Reducing and eliminating the income tax is also a priority for Senate President Robert Stivers.

Allowing the hardworking people of Kentucky to keep more of their earnings will attract new jobs and opportunities to the Bluegrass State and create a brighter future for all.

Grover Norquist is president of Americans for Tax Reform.