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Gov. Matt Bevin said he wants to find more revenue to put toward Kentucky’s ailing pension systems and overstretched state budget, but not everyone is on board if the governor’s solution would mean tax increases.

Bevin said he wants to call lawmakers back to Frankfort later this year to hammer out a plan that would help the state generate more revenue through economic growth and eliminating tax breaks.

Republican lawmakers have historically been wary of tax increases, but Sen. Joe Bowen, a Republican from Owensboro, said lawmakers might be forced to consider it given the state’s financial jam.

NPR

Earlier this week President Donald Trump released a blueprint for changes he’d like to make to the country’s tax code. Though specifics are still unclear, under one portion of the new plan, corporations–including Kentucky’s most profitable companies—would get a tax break.

Trump’s proposal would lower the corporate tax rate from 35 percent to 15 percent, reducing tax revenue into federal coffers by an estimated $2 trillion over 10 years, according to the Tax Foundation, a D.C.-based think tank.

Tyler Houlton, director of federal affairs at libertarian-leaning Americans for Prosperity, said the move would spur economic growth.

The debate over same-sex marriage is one that has heated up this year, with the Supreme Court striking down the Defense of Marriage Act (DOMA), which blocked the federal government from recognizing gay marriage. Seven states in 2013 saw same sex marriage legalized through court order, laws passed by state legislatures, or through popular vote.

WKU Economics Professor Susane Leguizamon has conducted  some research about an aspect of same sex marriage that most people probably haven't thought about: namely, what would the impact of nationwide gay marriage be on federal and state income tax receipts?

The research conducted by Prof. Leguizamon and her two co-authors finds 23 state would see a new fiscal benefit from same sex marriage legalization, while 21 would see a decline. Seven states wouldn't be impacted in this way since they don't have income taxes.

You can request a copy of the research by emailing Prof. Leguizamon here.

Here are some excerpts from our conversation with Prof. Leguizamon:

How would same-sex marriage legalization impact the income tax revenues of the three states in our listening area: Kentucky, Tennessee, and Indiana?

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.

Governor Beshear and the sponsors of a bill that could save employers millions of dollars in federal unemployment insurance taxes have scheduled a press conference this afternoon in Frankfort.