Policy Agenda

Kentucky has made progress in reducing its income tax burden, but residents and businesses still face higher taxes than many competing states. Long-term affordability requires continuing to move toward a lower-tax environment while maintaining fiscal discipline. The state should accelerate reductions in the individual income tax with a long-term goal of elimination, while maintaining clear fiscal guardrails tied to revenue and reserve levels.

The state should also adopt stronger spending controls to prevent unsustainable growth in government expenditures. Limiting spending increases and maintaining structural balance will ensure that tax relief is sustainable. Simplifying the tax code by removing carveouts and broadening the base will further support lower rates and improve economic competitiveness.