Before we talk about more cuts and lower pensions, let’s stop giving away money through tax breaks. How bad is it? Here’s a quick table to show you.
[tweet_box design=”box_03″ float=”none”]Before we make more cuts and lower pensions, let’s stop giving away $$ through tax breaks.[/tweet_box]
The following numbers are from the state’s Tax Expenditure Analysis document, which is available for anyone to read. All we did for this post was take data from the summary and make a table of it.
Look through the table, think about all the cuts we’ve endured and are facing, and ask yourself if you see a problem here.
| Type of Tax | Income (millions) |
Income Lost to Tax Breaks | Tax Break / Income %age |
| Alchoholic Beverage | 132.0 | 2.8 | 2% |
| Bank Franchise | 100.0 | 5.2 | 5% |
| Coal Severance | 180.3 | 2.2 | 1% |
| Corporate Income | 528.1 | 328.0 | 62% |
| Gasoline | 653.2 | 16.8 | 3% |
| Individual Income | 4,100.0 | 6,300.0 | 154% |
| Estate | 51.0 | 68.1 | 134% |
| Insurance Premiums | 146.5 | 2.0 | 1% |
| Limited Liability Entity | 223.8 | 105.2 | 47% |
| Motor Vehicle Usage | 432.8 | 141.4 | 33% |
| Natural Resources Severance | 30.5 | 6.2 | 20% |
| Property | 563.4 | 714.3 | 127% |
| Sales and Use | 3,267.3 | 3,189.0 | 98% |
| Special Fuels | 196.8 | 78.5 | 40% |
| Tobacco | 242.2 | 1.2 | 0% |
| Totals | 10,847.9 | 10,960.0 | 101% |
Yes, those percentages are right. In some of the categories, the tax breaks are fairly small: 1% to 5%. In others, the tax breaks are substantial: 20%, 40%, and so on. Note also that we give back over 60% of our corporate taxes. The shocker, though, is that in some cases, we give back MORE than we take in.
And finally, in case you can’t believe that bottom line, let me spell it out for you:
We give away more as tax breaks than we take in as tax revenue.
[bctt tweet=”KY state government gives away more $$ as tax breaks than we take in as tax revenue.” username=”ForwardKY”]
We don’t need to once again take an ax to our state’s programs and services, such as schools and the justice system. And even if we want to talk about different approaches for the future, we don’t need to take an ax to our pension systems and to the benefits we owe to our people.
Instead, it is time to take a chain saw to the $10 billion in tax loopholes we give away every year.
And one more thing: take a look at that table and where our income comes from, and remember that the Governor wants to do away with both the corporate and personal income tax. Perhaps, before he does that, he and the administration should focus on the loophole problem first?
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