Bevin Touts Plan To Kill Income Tax, Raise Sales Tax
Gov. Matt Bevin says that if he’s reelected, he’ll push for changes to the state’s tax code, including a shift from the income tax to a sales tax and raising the state’s gas tax.
Bevin made the comments during the Kentucky Association of Counties’ (KACo) annual conference on Wednesday at the Galt House Hotel in downtown Louisville. He also suggested eliminating the state’s estate and inventory taxes and allowing local governments to raise the sales tax.
Bevin said that the state needs to “stop taxing the job creators and the wealth producers.”
“Let them keep the money, redeploy it and we’ll tax it then. That’s how it gets done. Let them build things with that money. Then indeed we’ll tax it and your school districts will benefit from that,” Bevin said.
Bevin said that the changes would make Kentucky more attractive to businesses and people looking to relocate. But he said in the long-term, the changes wouldn’t bring in more money — the only way to do that, he argued, is to bring more people in.
“We need to build an environment — tax structure and otherwise — to attract the next 2 million people here so that they will stay here, live here, pay taxes here,” Bevin said. “That’s the only way we climb out of the problems we’re dealing with. We need another 2 million people.”
Kentucky's population is currently about 4.4 million.
Bevin began floating his tax proposals in 2017, but so far, the state legislature hasn’t gotten behind them. Two years ago, Bevin promised to call a special legislative session for lawmakers to come up with changes to the state’s tax code, but the move never gained support from legislators.
Kentucky has had trouble generating enough revenue to meet budget demands amid surging financial obligations from the state’s pension, Medicaid and corrections systems.
Bevin has long advocated for phasing out the state’s use of an income tax and increasing sales taxes. He believes getting rid of personal and corporate income taxes will allow people and companies to redistribute wealth in the form of ages and expanding operations.
Jason Bailey, executive director for the progressive Kentucky Center for Economic Policy, said in a 2017 interview that Bevin’s tax philosophy would just encourage companies to keep more money.
“What most often happens is the company or the wealthy individual will just pocket that money or spend it on a luxury good or travel,” Bailey said. “What it does is undermine those core investments and building blocks of growth like education that require us to all chip in for taxes.”
Democratic Attorney General Andy Beshear, Bevin’s opponent in this year’s race for governor, has proposed expanding gambling in Kentucky—legalizing and taxing casinos, sports betting and online poker.