A new study of the tax bill rushed through the Kentucky General Assembly Monday shows the changes it makes to the tax code are likely to lower taxes for the wealthy while raising taxes for 95 percent of Kentuckians.
The analysis, performed by the Institute for Taxation and Economic Policy in Washington D.C., a liberal-leaning think tank, studied the impact of the tax cuts and increases on Kentuckians.
The bill applies Kentucky’s 6 percent sales tax to 17 services, increases the cigarette tax by 50 cents per pack, and cuts the individual and corporate income tax to a flat 5 percent tax. It also cuts some typical tax deductions, including those for medical expenses, medical insurance, paid taxes and investment income.
“When sales taxes are increased, it’s going to hit lower-income people harder,” said Aidan Davis, a senior policy analyst with the institute.
According to the study, the top 1 percent of Kentuckians will see an average tax cut of $7,086 from the plan. People who make between $175,000 and $427,000 a year are likely to see an average tax cut of $776. Anyone who makes below $175,000 is likely to see a tax increase of $93 to $213.
The bulk of the increase for Kentuckians comes from the sales tax.
The hardest hit dollar-wise: Kentuckians making between $55,000 and $92,000 will see their taxes go up by an average of $213 a year. Percentage-wise, the bill is a nearly 1% tax increase on the poorest people in the state just to save millionaires a lousy seven grand.
Also if you still get your insurance and retirement plan through your employer, congratulations, you won't be able to deduct as much for it so you'll be paying more taxes on those benefits as well.
So go for it Matt Bevin, sign into law the biggest tax increase on Kentuckians in state history.
Watch what happens to you in 2019.
Posts
No comments:
Post a Comment