American Forum Op-Ed

KENTUCKY FORUM

By Steve Boyce

Many Kentuckians share a frustration with the lack of legislative will to pass real tax reform which has resulted in a decade of annual revenue shortfalls, cuts in essential programs, one-time stop gap measures and a failure to make investments that will move Kentucky forward.

As a member of the Kentucky Forward Coalition, I have grown impatient with yet another state tax reform study, especially since it’s not clear that the study will be transparent or guided by Kentuckians’ values.

The Kentucky Forward Coalition proposes that any revision of our tax structure -- whether coming from the commission that Sen. Williams has called for, or any another -- begins by establishing a set of principles that benefit all Kentuckians and move us forward. The Kentucky Forward Coalition serves or represents a sizeable portion of the people in our Commonwealth, and these are the principles that we lift up as necessary to create a better Kentucky:

• Revenue solutions should sustain a good quality of life in Kentucky through essential investments in good schools, health care, public safety and other necessary public structures and services.
• Our taxes should be balanced, reasonable and fair, with fiscal responsibilities shared equitably among all citizens and businesses by minimizing taxes on low-income people and bringing more balance to our tax code.
• Our tax structure should be sustainable, with reliably constant sources of revenue that grow along with the economy.

If we use these principles to guide reforms to our tax structure, we will all be in a better position to live up to our potential. Kentuckians are smart, resourceful, helpful and creative. We’d all realize our own potential more often by adequately funding the necessary elements of strong communities. This includes good schools with smaller classes, access to quality health care, police and fire departments that have the resources to protect and serve and water that we know is safe to drink.

A lot of ideas get put under the banner of tax reform. Not all of those ideas adhere to principles that reflect our values. Some would allow us to share in our responsibilities equitably and fairly, while others would knock our tax system further out of balance by shifting responsibility away from wealthy individuals and major corporations and onto working families. Some make it easier to pay for the public investments we need to grow and improve the quality of our lives, while others intend to shrink those necessities and turn Kentucky into a place of greater inequality.

Shifting to a tax system based on sales, instead of income, would turn our already out-of-balance tax system completely upside down. It would shift more responsibility to people who are less able to pay -- those whose wages and income have stagnated over the years. We know this from the studies that have already been done, most recently by the Institute of Taxation and Economic Policy. This shift would not benefit our economy, and would be harmful to our families. That’s not what Kentuckians deserve.

A sustainable tax structure means a broad base of taxes. That’s because different taxes respond differently to economic changes, and a broad-based tax system helps maintain and grow the revenues needed. Eliminating individual and corporate income taxes radically narrows our tax base and impacts revenue sustainability over time. That, unfortunately, is the goal of some. This will not help us create the commonwealth that we deserve.

Kentuckians want reform. But reform is not just making something different, but making something better. Better for Kentucky means generating revenue to help create the kind of society Kentuckians deserve and want by modernizing our taxes and bringing balance and fairness to our flawed system.

Every Kentuckian has a stake in our taxes and budget, so we deserve to be represented when recommendations are agreed upon. Any study of reform should invite everyone into the conversation by starting with these questions: What kind of communities do we want, and how should we pay for them? The answers to those questions are defined not by experts, but by our values.
--------------------------------------------------------------------------------
Kentucky Forward is a coalition of labor, faith, education, health, and community organizations. Boyce is the Chair of member group, Kentuckians for the Commonwealth.
--------------------------------------------------------------------------------
Copyright (C) 2011 by the Kentucky Forum. 1/11