Kentucky Governor Matt Bevin Planning to Cut Taxes for the Rich, Raise Them on the Poor

Kentucky Governor Matt Bevin recently told a business news outlet that he wants to make the commonwealth’s tax code even friendlier toward the wealthy.

On Monday, Gov. Bevin sat down with The Lane Report — a Lexington, Kentucky-based business publication — and shared his plans on reforming Kentucky’s tax code to be overly reliant on the commonwealth’s working-class residents.

“What would an ideal structure look like from my perspective? It would be one in which we are taxing consumption and not production,” Gov. Bevin said. “This would be moving more to a model we see in states like in Texas or Tennessee or others, who are taxing no income but rather the consumption. That’s an ideal approach.”

While Bevin framed his ideal tax system as one that “would not be punitive to those who are creating jobs and creating wealth,” it’s important to read between the lines on who ends up paying the bulk of the taxes in states like Tennessee, Texas, and other zero-percent income tax states like Florida, New Hampshire, South Dakota, and Washington state.

According to a 2015 report from the Institute on Taxation and Economic Policy (ITEP), the states Bevin mentioned to the Lane Report, as well as other states that don’t tax income, have the most regressive tax systems in the country — meaning the poor and working-class pay a greater share of state taxes than the rich.

As the below chart shows, the aforementioned states get the bulk of their revenue by taxing the poorest 20 percent of residents. However, the richest one percent contribute just a single-digit share of the state’s total tax revenue. In Texas, for example, the poorest 20 percent have to pony up 12.5 percent of the state’s total tax revenue pie, with the wealthiest one percent of residents contributing just 2.9 percent. Tennessee’s tax structure is similar, with the bottom 20 percent responsible for 10.9 percent of the state’s total taxes, and the top one percent on the hook for just three percent of total revenues:

Bevin
(Chart by the Institute on Taxation and Economic Policy)

Coincidentally, perhaps because Kentucky still has a five percent income tax as opposed to states that tax income at zero percent, the commonwealth has a higher per-student spending amount in its public education funding than any other state with a zero percent income tax rate (New Hampshire and Washington state being the lone exceptions).

According to 2016 data compiled by Governing magazine, Kentucky spends an average of $9,863 per student, each year. That’s a higher per-student spending amount than Florida ($8,920), Nevada ($8,960), South Dakota ($9,176), Tennessee ($8,810), and Texas ($9,016). It stands to reason that if Gov. Bevin succeeds in making Kentucky’s tax code more regressive like the states he mentioned in the Lane Report interview, per-student education funding could drop.

Gov. Bevin did not return Grit Post’s calls and text messages to his cell phone as of this writing.

Michael Boone is a freelance journalist and columnist writing about politics, government, race, and media. He graduated from Texas Southern University’s School of Communication, and lives in Houston’s Third Ward.

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