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KY annually generates $2,600 of revenue Per capita through taxes. There is an estimated $15,000 liability Per capita over the next 30 years. That is if nothing
by oflannabhra 9y ago
KY annually generates $2,600 of revenue Per capita through taxes. There is an estimated $15,000 liability Per capita over the next 30 years. That is if nothing gets worse.
Some oversimplified calculation: $15,000 over 30 years would be $500/year, equivalent to a 20% tax increase.
Increased taxation cannot resolve the crisis alone.
But, the larger point is that there has not yet been any reform of the current situation
- zeypher 9y agoKentucky's state income tax rate is between 2-6%. If it would only take 20% increase in state tax receipts to make their pension system solvent, that's just a little over 1% increase in effective tax rate, which would still leave KY in the lower half of states by tax burden. If you make the tax rate change a bit more progressive, say 2% at the top, it could be zero change in income tax burden at median income and below. Kentucky also gives favorable tax treatment to retirement and pension income, so if you wanted to reduce a percived moral hazard of who pays and who benefits, KY could simultaneously reduce the preference given to lower the required rate changes further. Increased taxes can solve the situation fairly trivially, and still leave KY in the middle of the pack for total tax burden.
- justin66 9y ago> Increased taxation cannot resolve the crisis alone. None of the numbers you mentioned support that conclusion at all.