Wednesday, November 14, 2012

Kentucky's Tax Base, Broad as the Grand Canyon


The Kentucky Blue Ribbon Tax Reform Commission is looking for ways to "broaden the tax base." Well, if anyone pays taxes, it is almost everyone in Kentucky. 

How broad is the tax base? I conservatively estimate that well over 90 percent, if not 100 percent, of Kentucky's citizens pay at least some form of the various taxes, surcharges, and fees levied by the commonwealth.

In fact, if the overall breadth of Kentucky's tax base was compared to a landmark, it  may well be called the Grand Canyon of the Commonwealth. And with good reason, after reviewing just some of the obvious taxes paid by Kentuckians, which currently include: payroll taxes (medicare, social security, etc.); federal, state, and local income taxes; sales taxes on homes, autos, clothing and household items purchased; taxes and surcharges on cell phones, home phones, internet; cable, DSL, and satellite TV; sewer, electricity, and water; property taxes, or if you rent, the owner tacks that on. You pay taxes to get marriage licenses, driver licenses and pet licenses, you pay taxes each time you renew your vehicle, boat, or motorcycle registration. You pay taxes on dental, medical, auto, home, and life insurance, as well as gasoline, kerosene, diesel, propane, and every other form of fuel available. And if you think death is the only way out, you are wrong, because that is taxed too.

It seems the commonwealth already has has an extremely broad tax base. However, the Kentucky Blue Ribbon Tax Reform Commission recently proposed taxing retiree income starting at $15,000 dollars, basically $3,140 dollars above the 2012 U.S. individual poverty level of $11,860. This is little more than the poor feeding the poor, and far from a solution to the problem of free fall government spending.

 In conclusion, I offer a simple question to all who read this. At what point should the government spend less? When everyone, except the government, is living in poverty? That seems to be the plan, because the Blue Ribbon Tax Reform Commission failed to make a single recommendation to reduce government spending.

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