FRANKFORT, Ky. — A Kentucky House panel advanced a bill Thursday calling for a deeper cut in the state's individual income tax rate, as Republicans took another step toward achieving a long-running policy objective.
The measure aims to lower the income tax rate by another half-percentage point to 4%, effective Jan. 1, 2024. It's a follow-up to a sweeping law enacted last year that triggered a reduction of the individual income tax rate from 5% to 4.5% at the start of this year.
The ultimate goal for GOP lawmakers is to phase out individual income taxes in Kentucky.
The latest bill, put on a fast track by GOP House leaders, cleared the House Appropriations and Revenue Committee.
It could be voted on by the full House as soon as Thursday. The bill also finalizes the half-percentage-point drop in the tax rate at the start of this year.
The bill's supporters said it would enable working Kentuckians to keep more of their income.
"We're saving for the future, not only for emergencies but for investments," Rep. Brandon Reed said. "We are meeting the needs of the Commonwealth of Kentucky, and we're doing a great job of it. I know since 2017, we're putting epic reforms in and we're reaping the benefits, we're reaping the harvest."
However, opponents warned the cuts will cause future budget hardships by depleting a key revenue source.
"Sure, middle-income families like mine will get an income tax reduction of about 300 bucks. Guess how much we're going to pay in summer camp tax which was added to the legislature this year in an attempt to offset these tax cuts from the rich: $300 bucks," Rep. Josie Raymond (D) said.
The Senate isn’t expected to take up the bill until February, when lawmakers will reconvene after an extended break that begins after this week. Republicans have supermajorities in both chambers.
Make it easy to keep up-to-date with more stories like this. Download the WHAS11 News app now. For Apple or Android users.
Have a news tip? Email assign@whas11.com, visit our Facebook page or Twitter feed.