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The tax debate in Kentucky
Monday, November 22, 2004 Every so often, a research report touches off a significant public policy debate. That's what happened in Kentucky with the so-called Coomes report. Drafted by University of Louisville economist Paul Coomes, the report makes the case that Kentucky's tax system is out of date with current competitive realities. That finding, standing alone, is not surprising. Many state tax systems are in deep need of reform. The Coomes report, however, goes on to raise significant questions about the geographic distributions of burdens and benefits through the tax code. Specifically, the report notes that urban areas in the state tend to contribute far more in revenue than what they get back. In the case of Louisville, for example, the city gets 59 cents back on every dollar of state taxes it sends to Frankfort. Tax policy always involves resolving the tension between efficiency and equtiy. Finding the right balance point -- one that promotes economic growth but also promotes fairness -- involves tough tradeoffs. Unfortunately, state tax reform rarely moves forward with a stable policy framework. Instead, state (and federal) tax laws represent the accumulation of hundreds of small decisions, driven (too often in my view) by narrow political considerations. That's how we get tax laws that are complex, inequitable, and inefficient. Read more about the debate going on in Kentucky. A map for Kentucky The imperative for reform Tax study likely to be a tough sell Changes Needed to Make Kentucky More Competitive Northern Kentucky's fair share Download the Coomes report posted by Ed Morrison | |
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