I’ve been fighting for years to see Kentucky overhaul its antiquated, “behind the 8-ball” tax code. This year’s gubernatorial race brings us at least some progress.
During the Republican primary, candidate Phil Moffett was the first to go on record — announcing on my radio show — that he would support a plan to eliminate the income tax in Kentucky and institute a broad-based, low-rate sales tax.
Now, the winner of the GOP primary, Senate President David Williams, has introduced his economic plan. It includes the same idea, eliminating the corporate and income tax and replacing it with a revenue neutral, broad-based sales tax.
The response from our current governor ranges from stubborn silence, to mumbling something about not accepting “any tax increase of any kind.”
I’m not sure what he’s talking about. The plan I’ve been advocating is a tax cut, any way you look at it. Tax advisor and State Rep. Bill Farmer of Lexington has been fighting this fight for years, and he’s done the math. His figures show that such a plan with a 5.5-percent sales tax (note that’s lower than the current 6 percent) that exempted medicine and groceries, would put an average of $2,500 per year back into the hands of working Kentucky families. Who couldn’t use a $2,500 per year raise?
Some argue that people who are living off of savings rather than income would be disproportionately affected. But they forget that everything we buy currently has the corporate taxes built into the price.
Corporate taxes are the most ridiculous and redundant taxes of all. Every dollar of corporate income already is taxed somewhere along the line. Taxing it again only burdens consumers. Eliminate corporate taxes and you create room for competition, which drives prices down, and everyone benefits.
Eliminating the income tax also makes our tax system more transparent. If people see the tax they pay when they make a purchase, they’ll hold their government accountable if politicians try to raise it. This system puts the choice of how and when and how much we are taxed back in the hands of consumers.
What Gov. Beshear and other politicians who oppose such a dramatic overhaul to our system are really afraid of is losing control. I’ve lost count of the number of press releases from the governor’s office that I receive in my email nearly every day announcing that this company or that company is adding a few jobs here and there. All of them are the result of some government bureaucrat at some level having chosen a winner over someone else. How many jobs would our economy create if everyone got to play by the same rules?
If you want real economic growth, you have to have a competitive edge. The governor getting to choose who wins and who loses economically is not a competitive edge. Look at the surrounding states, which all have job and economic growth far outpacing Kentucky. Indiana, Ohio and Tennessee all have a better tax climate.
There’s a lot of talk out there about people “paying their fair share.” What kind of tax system is fairer than a tax system based on equality? I’m glad that at least one of the candidates for governor this year is willing to go on record that we need real change. But whether he wins or loses, I’m not going to give up on Kentucky’s potential.
If Williams wins, you can bet I’ll hold him accountable to his plan. And if the governor is re-elected, I can assure you, he can expect another call from me about finally moving Kentucky forward.
Leland Conway is the executive editor and co-founder of www.conservativeedge.com and the host of the Pulse of Lexington on News Radio 630 WLAP.
