A report by Kentucky Online Action Group on Saturday, November 17, 2012 at 2:03pm
KY TAX REFORM UPDATE:
The Governor’s Blue Ribbon Tax Reform Commission recently voted to
support an “angel investor” tax credit, giving wealthy investors "up to
a 40% tax break" on monies used to fund start-up businesses.
Meanwhile, the Blue Ribbon Tax Reform group still supports the proposal
to "broaden the tax base" by including retirees earning $15,000 or
less. This appears to be a prime example of how government takes from
the poor and gives to the rich, through the tax code.
How does the government rob the poor to pay the rich? Through the tax code, of course. Under the "angel investor" tax credit, strongly supported by the Governor's tax reform group, a person with the money to do so, may fund a person, or group, to start a new business. In return, the person funding the new business receives part ownership, part of the profits, or another form of return from the new business. Now, in addition to getting some form of payback from the new start-up business, the Blue Ribbon Tax Commission wants to give "angel investors" a tax credit for up to 40 percent of the money put into the new start-up.
We do not have all the details on the tax commission's proposal, however, as an example, let us say the "angel investor" provides $100,000 dollars to a new start-up business. When the angel investor files state taxes, he/she would receive a 40% tax credit on the $100,000 dollars. In other words, the angel investor receives a $40,000 reduction in taxes. Put another way, that is $40,000 dollars not collected in state income taxes. And Kentucky taxpayers will have to pay for that $40,000 tax credit. Under the Blue Ribbon Tax Commission's proposal, those Kentucky tax payers would include retirees making as little as $15,000 dollars a year, which is only $3,140 over the national poverty level.
How does the government rob the poor to pay the rich? Through the tax code, of course. Under the "angel investor" tax credit, strongly supported by the Governor's tax reform group, a person with the money to do so, may fund a person, or group, to start a new business. In return, the person funding the new business receives part ownership, part of the profits, or another form of return from the new business. Now, in addition to getting some form of payback from the new start-up business, the Blue Ribbon Tax Commission wants to give "angel investors" a tax credit for up to 40 percent of the money put into the new start-up.
We do not have all the details on the tax commission's proposal, however, as an example, let us say the "angel investor" provides $100,000 dollars to a new start-up business. When the angel investor files state taxes, he/she would receive a 40% tax credit on the $100,000 dollars. In other words, the angel investor receives a $40,000 reduction in taxes. Put another way, that is $40,000 dollars not collected in state income taxes. And Kentucky taxpayers will have to pay for that $40,000 tax credit. Under the Blue Ribbon Tax Commission's proposal, those Kentucky tax payers would include retirees making as little as $15,000 dollars a year, which is only $3,140 over the national poverty level.
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