By Kentucky State Treasurer Allison Ball
Middle class families across the commonwealth are beginning to feel relief because of Congress’s recent federal tax reform. The historic reform means Kentucky’s middle class families will be able to keep more of their hard-earned dollars. According to the Senate Finance Committee, a family of four earning the median income of around $70,000 could pay $2,000 less in federal taxes. That would be $2,000 more dollars per year in their pockets. This money could be used by families to save for their children’s college educations, invest in retirement, or provide a financial buffer for their monthly expenses. But Kentucky needs more than federal tax reform. We need tax reform at the state level to further expand economic prosperity for Kentucky families and businesses.
Kentuckians have immediately benefited from federal tax reform. Because of this Congressional action, many Kentucky employees are receiving bonuses or raises. AT&T is distributing $1,000 bonuses to more than 2,000 Kentucky employees; Turning Point Brands of Louisville is doing the same for 107 of its Kentucky employees, as is Atlas Air for more than 200 Kentucky employees. Walmart is also giving $1,000 bonuses, increasing its minimum wage, and improving maternity and paternity leave for employees. U.S. Bank is raising its minimum wage and giving approximately 3,000 Kentucky employees a $1,000 bonus. Humana, which employs more than 12,000 Kentuckians, is raising its minimum wage to $15/hour for full and part time employees, and UPS just announced major capital and pension investments.
This is just the beginning. Federal tax reform has brought relief to individual Kentuckians and these positive results will continue. Louisville Gas and Electric and Kentucky Utilities announced they will request approval from the Kentucky Public Service Commission to reduce customer bills by nearly $180 million, leading to direct savings on utility bills for consumers. Similarly, consumers served by Kentucky Power will also see lower rates in 2018 because of federal tax reform. Further, we know that lower utility rates can also support business expansions and investments in the commonwealth. When businesses in Kentucky pay less burdensome taxes, they are able to help grow the economy by creating new jobs and improving wages for employees. State tax reform can have the same kind of impact.
By following Congress’s lead and adopting meaningful tax reform at the state level, we can usher in a wave of economic prosperity for Kentucky’s middle class and business community. Federal tax reform has shown that lessening the tax burden increases economic growth. Kentucky has a great opportunity to reform and simplify its tax code. Now, more than ever, Kentucky should work to help middle class families to keep more of their hard-earned money and provide for greater business growth throughout the commonwealth.