Kentucky Gov. Steve Beshear’s tax reform plan would raise an additional $210 million in revenue each year.
In announcing his proposal Tuesday, Beshear said the plan would make Kentucky’s economy more competitive with neighboring states by taxing services, lowering income taxes, and reducing the top corporate income tax by a tenth of a percent.
Newly taxed services would include auto and computer repair, landscaping, janitorial services and security systems, as well as luxury services like tanning salons, golf courses and marinas.
It would also provide tax credits to the bourbon and equine industries, and raise the tax on cigarettes and put a new tax on electronic cigarettes.
“This is a beginning point,” Beshear said Tuesday. “it’s a proposal that I think makes sense. I think it’s fair. I think it’s equitable to everybody. And it does what ultimately we want, and that is to have a modern tax code for Kentucky that will create revenues as the economy grows and that will attract new jobs in here and increase our competitiveness.”
Beshear said he will not ask the state House and Senate to take up tax reform unless they can agree on what reform looks like, especially since it’s an election season.
GOP House Floor Leader Jeff Hoover has called for a bipartisan committee to hammer out an agreement between both chambers. Senate President Robert Stivers said he supports the idea, but doesn’t think a panel is necessary.
“Representative Hoover’s idea is that we engage in a discussion, and from that perspective, I agree,” Stivers says. “You know, it’s a matter of how we engage in that discussion, and I think there’ll be a lot of discussions between the governor’s office, the group that we have here and the House.”
Stivers and Beshear contend that there’s still plenty of time left in the session to get something passed.