PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

STATE SPOTLIGHT: Kentucky…Positive Policy Steps Taken

By at 2 November, 2019, 8:05 pm

by Raymond J. Keating-

Small Business Policy Index 2019: Kentucky ranked 30th among the 50 states.

SBE Council’s “Small Business Policy Index 2019” ranks the 50 states according to 62 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.

Small Business Tax Index 2019: Kentucky ranked 26th among the 50 states.

SBE Council’s “Small Business Tax Index 2019” is included in the Policy Index report, ranking the states according to a wide array of tax measures, including income, capital gains, property, death, unemployment, and various consumption-based taxes like state gas and diesel levies.

When it comes to its public policy climate for small business and entrepreneurship, Kentucky – one of three states with a gubernatorial election in November – ranks as a middle-of-the-pack state.

According to SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth,” which ranked the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures, Kentucky came in at 30 among the 50 states. As for the “Small Business Tax Index 2019,” a subset of the larger “Small Business Policy Index” whereby the states are ranked only on tax measures, Kentucky came in at 26.

Among the state’s positive attributes, Kentucky has low property taxes; and is a right-to-work state. Meanwhile, negatives include a fairly high level of state and local government employment, and the imposition a state death tax.

Positive Tax Steps Improve the Business Environment

Kentucky made a positive step forward with a 17 percent reduction in the state’s personal income, individuals capital gains, and corporate income and capital gains taxes. Specifically, the 6 percent tax rate in each case was reduced to 5 percent.

That change meant that Kentucky improved its competitive position among the states. Without the tax cuts, Kentucky would have ranked 33rd rather than 30th on “Small Business Policy Index,” and would have come in 35th rather 26th on the “Small Business Tax Index.”

More work is needed to improve Kentucky’s policy environment for entrepreneurship, small business and investment – all critical to economic growth – but the recent tax cut clearly was a plus.

Heading into the November 5th election, the question for voters, including small business owners, is:

Which candidate will reduce governmental costs imposed on free enterprise, and which candidate will provide relief that allows economic, income, employment and entrepreneurial growth to flourish?

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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