Kentucky Club for Growth
fighting and winning for economic freedom

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July 20, 2012

A Tax Break Is Not "Spending"

We were greeted with this headline and article from the Lexington Herald Leader today:

Kentucky spent $1.29 billion on economic development incentives over last decade

Kentucky has spent $1.29 billion on economic development incentives over the last decade, mostly in the form of tax breaks to companies that pledged to create jobs, according to a new report shared Thursday at a legislative hearing.

We are not advocates of using tax breaks as economic incentive, preferring instead a competitive tax code that attracts employers and enabled entrepreneurs. Offering tax breaks to certain companies that meet certain conditions is allowing the government to pick winners and losers in the marketplace. Instead of letting the government chose which corporations pay $129 million less in taxes annually, Kentucky could simply cut the corporate income tax rate 36% and expect the same revenues.

But we digress from the point we wished to make, which is that, under no circumstances can keeping the money you earned and not providing it to the state be considered state spending!

The state is not "spending" by not taking your money from you.

The article has other half-analyzed ideas, like:

Kentucky is a tax-friendly state for businesses. The overall share of business profits taken as taxes in Kentucky is 18.2 percent, compared to 19.3 percent on average for the peer states.

We haven't seen this particular study, but we do know that Kentucky has a disproportionally progressive tax system and relatively high state and local income taxes, both of which place Kentucky at a competitive disadvantage when it comes to creating and attracting businesses.

The article conclude with Governor Beshear's Tax Hike Commission Specialist Jason Bailey begging for tax hikes:

Kentucky should throw less money at businesses and invest more in schools, vocational training, transportation and high-speed Internet access, said Jason Bailey, director of the Kentucky Center for Economic Policy in Berea.

Maybe he should move to tax-hike happy Illinois. Although we know he won't find a job there.

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03/29/12 : RS12 HB 499 - KEY VOTE - Insurance Premium Tax Hike

03/29/12 : Lip Service to Kentucky's Debt Problem

03/19/12 : RS12 HB 202 - KEY VOTE - A Health Care Mandate Without Precedent

03/15/12 : RS12 SB 10 - KEY VOTE - A Constitutional Amendment to Guarantee Legislative Oversight of Regulations

03/15/12 : RS12 SB 4 - KEY VOTE - Improving Regulatory Accountability

03/12/12 : Clarifying Redistricting, Maybe

03/08/12 : House Passes Budget Quickly with Eight Percent Spending Increase

Lexington Herald Leader 5/10:

"Thayer, 44, responds by calling Hostetler "a little desperate." Thayer touts his conservative support from U.S. Sen. Rand Paul, R-Ky., the National Rifle Association, the pro-business Kentucky Club for Growth (which ranks him best among 38 state senators) and the anti-abortion Kentucky Right to Life."


Last weekend, the Kentucky Club for Growth's strong anti-tax stance was recognized in the Courier Journal.

But other political experts say they aren't convinced outside groups will want to get involved, especially with public polling showing Beshear with a double-digit lead and Williams' record of occasionally supporting tax increases failing to excite conservative groups such Club for Growth or the tea party-related FreedomWorks.

"They're adamant about the 'no tax' thing," said Jennifer Duffy, a senior editor with the non-partisan Cook Political Report.

We are adamant about the 'no tax' thing, and we will continue to be the taxpayer's advocate in Frankfort.


Drees: Raise gas tax to fund bridge - Pat Crowley, NKY.com

Ky. House nears tax vote - Pat Crowley, NKy.com


Donor records might have similarities - Lexington Herald-Leader

Club for Growth launches in Oregon

The Kentucky Club for Growth is proud to announce its 2007 scorecard rating members of the Kentucky General Assembly on fiscal issues.

How did your legislators do?


House Passes Budget Quickly with Eight Percent Spending Increase
Yesterday, the Kentucky House passed a budget for FYs 2013-2014. While most of the legislative discussion centers on cuts, the General Fund budget totals $19.5 million which represents an 8% increase over FY 2011-2012. Even if you compare it only...

What Farm Receipts Say About the Health of the Horse Industry in Kentucky
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The NFIB reports: For the fifth consecutive month, NFIB's monthly Small-Business Optimism Index fell, dropping 0.9 points in July--a larger decline than in each of the previous three months--and bringing the Index down to a disappointing 89.9. While the national...

Employment Trends and Rates
Unemployment in Kentucky inched downwards this month: Kentucky's unemployment rate fell to 10 percent in April, down from 10.2 percent a month earlier. The state added 3,800 jobs in the month, as "Kentucky's economy continued to show signs of improvement...

State Budget Surplus Good News for Kentucky Economy
At the end of every fiscal year in June, the state always runs a small surplus. No matter the economic circumstances or budget cuts, because the state is constitutionally required to balance the budget, the state will end up with...

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The KY Club for Growth seeks principled candidates who are committed to the following:

* Free market principles
* Lowering taxes
* Reducing spending
* Decreasing the size of government
* Judicial reform
* Protecting property rights
* Expanding school choice
* Reducing needless regulation

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