Saturday, June 6, 2009

David Williams Wants MORE Taxes?

Ronnie Ellis is reporting that Sen. Pres. David Williams disagrees with Gov. Steve Beshear on the amount of Kentucky's budget shortfall, and has a different idea about how to raise whatever funds we're short. Instead of agreeing to video gambling terminals at Kentucky racetracks, Williams apparently wants to raise taxes. Again.

Everyone seems to agree on one thing – although there are some competing data – the horse industry is in trouble. But Williams says there’s a better way to boost purses and breeders’ incentives than gambling, offering a plan for a 10 percent tax surcharge on lottery tickets, using some sales taxes on horse products, and taxing out of state betting on Kentucky races to boost purses and incentives. Beshear and spokesmen for Stumbo say allowing the VLTs at tracks is the only workable, available option to help the industry.

Let's unpack that.

Williams tax no. 1 would impose a "10 percent tax surcharge on lottery tickets," according to Ellis. Lottery tickets are sold to the poorest of the poor; it is already the most regressive tax we have. The notion of further taxing these desperate people is very troubling.

Williams tax no. 2 would involve "some sales taxes on horse products." Apparently the idea is to reallocate the revenue from these taxes to increase the race purses. However, if everyone agrees that the horse industry is already in trouble, we should be looking at cutting taxes specific to that industry, not raising or even reallocating them.

Williams tax no. 3, Ellis explains, contemplates "taxing out of state betting on Kentucky races." Although I appreciate the effort to sock it to the out-of-staters, this tax may not even be constitutional.

Williams's proposal does not come in a vacuum. Just last session, Williams agreed to a huge tax hike that hurts Kentucky's other signature industry, the Bourbon distilleries. That provided a long-awaited opening to Indiana Gov. Mitch Daniels, who is said to be aggressively wooing Brown-Forman to move to New Albany.

If Kentucky persists in making its tax structure hostile to those industries that make our Commonwealth unique, we will lose those industries. Take away the horse industry and Bourbon industry from Kentucky and we don't look much different than, say West Virginia. These industries define us. We must protect them. Raising taxes is not a solution and would hurt the very industries that need our help.

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