Source: Bluegrass Institute
by Sai C Martha & Rea S Hederman Jr.
“Kentucky has established itself as a national leader in pro-growth tax reform after landmark legislation in 2018 replaced a complex graduated income tax with a flat rate and broadened the sales tax base. These structural improvements have propelled the Commonwealth’s business tax climate ranking from 37th to 18th and built a historic Budget Reserve Trust Fund. To sustain this competitive momentum and address unprecedented workforce mobility, The Buckeye Institute used its dynamic scoring model—STELA—to model the economic effects of the next two phases of tax reform: a scheduled reduction to a 3.5 percent individual income tax rate in 2026, and a hypothetical reduction to three percent in 2027.” (03/09/26)
https://www.bluegrassinstitute.org/continuing-ky-tax-reform-efforts/