Thursday, November 19, 2009

Linda B. Blackford: Kentucky's Poor spend larger percentage on taxes

Poor spend larger percentage on taxes
By Linda B. Blackford
Lexington Herald-Leader

Low and middle-income Kentuckians pay a larger share of their incomes on state and local taxes than wealthier people do, making the tax system one of many in the country that is inherently unfair, according to a new study.

The Institute on Taxation and Economic Policy in Washington, D.C., studied tax codes in every state and concluded that the vast majority depend too much on sales and property taxes, which then puts a greater burden on the lower-income population.

"State and local taxes are profoundly unfair around the nation, and Kentucky is no exception," said Matt Gardner, the author of the study and director of the institute, which bills itself as a non-partisan, non-profit research group.

The study found that, in 2007, people making less than $15,000 a year paid 9.4 percent of their income to sales, property and income taxes, while those making about $36,000 paid 11 percent.

In contrast, the wealthiest 1 percent of Kentuckians, those making more than $346,000 a year, paid 7.1 percent. After federal deductions, the percentage is 6.1.

In 2002, the group did a similar study, which found that the poorest Kentuckians paid 9.8 percent of their income in sales, property and income taxes, while the richest 1 percent paid 7.8 percent.

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