House Bill 1, which would reduce Kentucky’s income tax by another half point to 4 percent at the beginning of next year, made it out of the House Thursday morning.
It’s part of an overall effort to gradually eliminate the state income tax and move Kentucky toward a consumption-based system similar to Tennessee.
Representative Jason Petrie of Elkton says naysayers who believe the process will force the commonwealth to dip into its reserves are misguided by relying on old numbers that don’t reflect the current growth and budgeting climate in Kentucky.
While the sales tax has been expanded to some services in Kentucky to help with the reduction of the income tax, Petrie stressed the sales tax rate has remained the same with no intention of raising it.
Representative Myron Dossett of Pembroke noted Clarksville’s explosive growth compared to Hopkinsville over the last 50 years and says legislators who don’t live near the Tennessee state line may not understand how the communities are competing for the same population growth.
The bill now heads to the Senate for consideration.