PRESS
RELEASE
Contacts:
Douglas Hall, PhD
Senior Analyst – State Fiscal Analysis Initiative
Kentucky Youth Advocates
502-875-4865
Anne Joseph
Executive Director
Kentucky Task Force on Hunger
859-266-2521
To
view an embargoed copy of the Report:
State Income Tax Burdens on Low-Income
Families in 2000
http://www.cbpp.org/3-1-01sfp-pr.htm.
Kentucky’s
Working Poor Face
Harshest Overall Tax Burden of all States
A report released today by the Center on Budget and Policy
Priorities (CBPP) reveals that Kentucky continues to collect state income tax
from families with incomes substantially below the poverty line. The report
notes that among the 42 states with an income tax, Kentucky has arguably the worst
overall record of taxing the poor, as the very worst offender in two
categories, and second worst in three others (see accompanying fact
sheet).
At a time of recent economic boom, many Kentuckians have not
shared in the state’s economic prosperity. Kentucky continues to tax working
people back into poverty. The report, State Income Tax Burdens on
Low-Income Families in 2000: Assessing the Burden and Opportunities for Relief
notes that “More than a decade ago, the federal government recognized the
inconsistency of encouraging poor families to work and then levying taxes that
pushed them deeper into poverty. President Ronald Reagan spoke forcefully in
the mid-1980’s about the foolishness of taxing poor households deeper into
poverty. Many states have made progress. But 19 states, including Kentucky,
still levy income taxes on two-parent families of four with earnings below the
poverty level.”
Debra Miller, Executive Director of Kentucky Youth
Advocates echoes this sentiment:
“Kentucky has emphasized the importance of fostering
self-sufficiency. Yet we burden the
working poor with taxes that are among the highest in the country. That doesn’t make sense for working
Kentuckians, and it isn’t good public policy.”
In times of general prosperity,
it may be easy to forget that that many people aren’t sharing in the good
times. Jane Chiles, Executive
Director of the Catholic Conference of Kentucky notes that “Amid widespread
prosperity, there is also significant poverty.
The state tax structure should be used to reduce poverty, not add to
it.”
Many states have provided additional income tax relief to
poor and near-poor families. The
federal government along with many states “have long recognized that taxing
poor families is counterproductive and unfair.” However, despite considerable
progress in other states, a Kentucky family of four owes income taxes on
earning of just $5,400. Kentucky’s tax threshold is less than 1/3 the
poverty line! Kentucky and Alabama alone
tax families at less than half the poverty line.
Last year, there were reassuring signs that decision-makers,
including members of leadership from both parties, were starting to get the
message. Governor Patton’s original
2000 tax proposal included provisions that would have significantly alleviated
the tax burden facing Kentucky’s poorest tax filers. Under his proposal, the tax threshold (one measure used by
the Center to determine tax burden) for a two-parent family of four, would
have moved from $5,200, to $18,200!
Unfortunately, we have not seen real movement in the 2001
Annual Session toward relief for working poor families. Additionally, we
have seen a concentration at the national level to propose tax relief for those
who need it the least, when we should be focusing on those who need it the most
– the working poor.
####