For Immediate Release: Thursday, January 5, 2023
Contact: Jim Waters @ (270) 320-4376

The Bluegrass Institute for Public Policy Solutions issued the following statement in response to today’s passage by the Kentucky House of Representatives of legislation reducing the state’s individual income tax rate from 4.5% to 4%.

Today’s decision by the Kentucky House giving final approval to a reduction in the state’s individual income tax rate reflects a responsible approach toward removing barriers to Kentucky’s economic vitality and competitiveness.

It follows the conditions established by House Bill 8 passed during last year’s General Assembly triggering reductions in the income tax rate if revenues for the previous fiscal year exceed expenses, cover the cost of the tax cut and maintain a Budget Reserve Trust Fund balance equal to or greater than 10% of General Fund revenues.

Reducing the income tax rate while ensuring budget stability and sufficient reserves will allow hardworking Kentuckians to keep more of the fruit of their labor, attract residents of other high-tax states looking to vote with their feet and encourage businesses needing an adequate workforce to consider expanding in or relocating to the commonwealth.

Neighboring and benchmark states with whom Kentucky competes for economic growth continue to make themselves more attractive to job seekers and entrepreneurs by lowering rates on income taxes, which discourage productivity, savings and investment. Kentucky must continue to do no less. 

For more information or comment, please contact Bluegrass Institute president and CEO Jim Waters at (270) 320-4376 or jwaters@freedomkentucky.com.