Kentuckians to Pay $690 Million More in Taxes Each Year

UPDATE 12/7/2012

 The Kentucky Blue Ribbon Commission on Tax Reform met for the last time  yesterday, and will now prepare and submit final recommendations to Governor Beshear by December 15th.  The proposed taxes are expected to raise almost $700 million annually for the commonwealth.

According to mycn2.com, some of the final recommendations included:

- Taxing retirees’ public pensions starting after $30,000 instead of the $15,000 level, proposed earlier by the commission. The state currently taxes retiree pensions just above $41,000 dollars.

- $290 million is anticipated from "taxes on cigarettes, closing some corporate loopholes and applying the state sales tax to certain services and utility payments."

MyCN2.com reported that "Kentucky currently taxes income on six brackets at rates ranging from 2 to 6 percent. Everyone in the state earning more than $8,000 is taxed at a 5.8 percent flat rate and those making more than $75,000 rare taxed at a 6 percent rate."

The commission also voted for an Earned Income Tax Credit which would provide the lowest income residents with extra cash, according to MyCN2.com.  

Read the full report at: http://mycn2.com/politics/opening-bid-from-tax-commission-690-million-will-it-be-enough-or-too-much-for-lawmakers

Kentucky - 18th Highest Gasoline Tax in U.S.

Based on the latest data from the American Petroleum Institute, Kentucky's July 1, 2012 tax increase, to 48.3 cents per gallon, made the state's gasoline the 18th most heavily taxed in the nation.

As a state, Kentucky is one of the largest consumers of gasoline in the nation. Residents of the commonwealth purchase nearly 51,267,000 million barrels of gasoline per year, or the equivalent of almost 1 billion gallons.

That is good news for Frankfort because the recent tax hike on gasoline should earn state government approximately 500 million dollars in revenues.

How does the tax affect the commonwealth consumer? Most people drive nearly 15,000 miles per year and get approximately 20 miles per gallon, which equals 750 gallons of gasoline per year.

To determine annual gasoline cost, multiply the 750 gallons of gas by the price per gallon, for example $3.59, and the total fuel bill for the year equals $2,692.50.

To determine the state excise tax amount, multiply the 750 gallons by  48.3 cents per gallon (to get actual dollar cost, use .483). The result is $362.25. That equals the state excise tax paid for the year, which is included in the total fuel bill.

Of course, there is also the 18.4 cents federal excise tax included in the price of each gallon of gas. The combined federal and state excise taxes are currently 66.7 cents per gallon in Kentucky, which means the total state and federal taxes on 750 gallons of gasoline is $500.25 annually.