Geoff Young for Kentucky House of Representatives
Issue #1 — Eliminate the Sales Tax
Kentucky should eliminate the sales tax, cut income taxes for poor and working Kentuckians, and increase taxes on large corporations and very rich Kentuckians.
Kentucky first implemented a 6% state sales tax in 1960, following an earlier attempt in 1934 that was repealed in 1936. The original rate was 3%, which increased to 5% in 1968 and finally to the current 6% in 1990. The 1934 sales tax was repealed primarily due to overwhelming public opposition during the Great Depression.
Organized opposition vigorously demanded that the sales tax be eliminated because it hit poor Kentuckians hardest. Many were unemployed with little savings, and small businesspeople opposed it as a "sales killer."
The issue dominated the 1935 campaign for Governor of Kentucky. Voters elected Albert B. Chandler (who was then the Lieutenant Governor), a prominent anti-sales-tax leader, who ran against the tax that Governor Ruby Laffoon had pushed through.
The 1936 General Assembly repealed it almost unanimously: 99 to 1 in the House and 36 to zero in the Senate, making Kentucky the first state to repeal its sales tax.
The revenue was replaced with income taxes (both individual and corporate) and excise taxes on luxury items such as gasoline, alcohol, cigarettes, motor fuel, and amusements. Kentucky shifted from taxing consumption to taxing higher-income people who could afford to pay more.
For the last 25 years, the Kentucky Chamber of Commerce has lobbied hard to eliminate the state income tax and calls it its top priority. The Chamber has backed expanding the sales tax to cover more services as part of its strategy to replace the income tax cuts. The Republican Party now controls 80% of the Kentucky House and 80% of the Kentucky Senate, and they have already lowered the income tax from 5% in 2022 to 3.5% today.
In my opinion, the Republican Party of Kentucky (the RPK) has exactly the wrong idea. Instead of eliminating the state income tax, we should eliminate the sales tax and make up for the lost revenue by taxing rich and extremely rich Kentuckians more.