Tagged: taxes

A new report by the Institute on Taxation and Economic Policy shows a big gap between Kentucky’s income levels on who pays taxes.

The report says Kentucky’s top 1 percent income bracket pays roughly 5 percent of the state’s income, while the bottom 20 percent pays 9 percent.

Middle income levels are saddled with a higher percent, the report said.

Jason Bailey, director of the Kentucky Center for Economic Policy, says the numbers show tax reform needs to happen quickly in Kentucky to better balance the burdens.

“This is one of the big issues that tax reform needs to address, the issue of the fairness of the tax system and the fact that there is inequity in who pays,” he said.

Lawmakers are likely to put off taking up recommendations by the state’s latest tax reform commission until a special session later this year.

The Internal Revenue Service will begin accepting tax returns Jan. 30. The IRS had planned to open tax season on Jan. 22, but had to push back the date because of last-minute tax changes Congress made to avoid the so-called fiscal cliff. 

Kentucky IRS spokesman Luis Garcia says the agency has had to re-program its computers and forms to reflect the late changes. 

"A lot of work, but we want to make sure the filing season runs as smooth as possible," Garcia replies.  The majority, 81% of people in Kentucky get a refund and we want to make sure that money gets sent as quickly as possible."

Despite the late start to tax season, the filing deadline remains April 15th.  This isn't the first time the IRS has had to deal with late action by Congress.  Two years ago, President Obama and lawmakers were at odds on many of the same issues.  That delayed the opening of tax season to mid-February.

Kentucky’s Blue Ribbon Tax Commission has spent months learning how the state’s tax system works, and is now beginning to hammer out proposals to reform the state’s tax code. The commission met again this week  in Frankfort to hear some final reports from the Beshear administration on how Kentucky’s current revenue systems work.