The Tax Foundation released its annual State Business Tax Climate Index last week, dropping Kentucky three spots from 2011 from no. 19 to no. 22. Kentucky scored low marks for having a high unemployment insurance tax and an alternative minimum tax on corporations, and for not indexing its income tax brackets. The Commonwealth scored well in its low property tax and a favorable sales tax that largely exempts business inputs.
To improve Kentucky’s competitiveness, Kentucky Chamber President and CEO Dave Adkisson delivered a letter to Gov. Beshear and Lt. Gov. Abramson spelling out the Chamber’s position on tax reform. In the letter, Adkisson outlined the Chamber’s tax principles and encouraged the administration to look at the total tax burden of Kentucky companies, including local taxes, as it compares to other states. Tax reform efforts should focus on business competitiveness and job growth, not simply as a way to raise new revenue. Rather, new revenue should come from economic growth.