What did the Kentucky Common Meeting do to assist with inflation?

FRANKFORT, Ky. (FOX 56) – Inflation and high gas prices continue to put a strain on Kentucky families. State lawmakers tried to move several bills to put more money in pockets during the 2022 session.

A brief cut to the state sales tax and a one-time tax rebate are among the ideas that never made it to the governor’s desk, but a bill freezing vehicle property taxes did get Gov. Andy Beshear’s signature and another cutting income taxes is awaiting approval.

“At the end of the day, it’s their money and so they should be taxed on the way that they spend it not on just the simple fact that they earn it,” J. Taylor Davis, president of DFG Advisory, told FOX 56.

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Financial advisors like Davis are optimistic as legislation like House Bill 8 could soon become law.

Davis helped advise on the legislation and said lawmakers were receptive to his suggestions the bill is among a number of measures the General Assembly took to ease inflation woes on the daily dime. It would extend sales taxes to certain services and set triggers for the state’s income tax to drop until it’s gone. Davis helped advise on the legislation and said lawmakers were receptive to suggestions, including which services would ultimately be included in the broadened tax base.

“I’m very supportive of the fact that Kentucky is evolving and doing its best to cut income tax because the states that we’re competing with have already done so,” Davis said.

“I mean does my tax go from 5% to 4% immediately? You know? They say it can go to zero if the state’s coffers bring in $21 billion, but we’re $12 billion,” Lawrence York, chief investment officer of ProActive Advisors, told FOX 56.

Other advisors like York are more skeptical of the immediate impact. He does believe it helps draw more business to the state, but isn’t sure a 1% cut will make a difference for poorer families.

“The food costs and gas tax is taking probably 25% more money out of people’s pockets,” he said.

York and Davis both suggested a freeze on Kentucky’s 26 cent gas tax could have made the biggest impact, as other states have done. Drivers can find some relief after a vehicle property tax freeze was signed into law earlier this session.

“You got a young family and the vehicle taxes go up, that tuition to the school they want to send their kids to, that’s extracurricular activities that that’s further eating away at their after tax income,” Davis said.