Kentucky bails out power companies

Kentucky's sales tax is 6% - the highest it's ever been. Although food is not supposed to be taxed in Kentucky, some food is. The tax applies to all restaurant meals as well as some foodstuffs purchased in stores.

But while Kentucky taxes food, it doesn't tax purchases made by utility companies or fans of prized horses.

This is in effect a bailout for corporations and the financially secure.

Not only is this unfair to the working poor. It's also sapped the state budget - which may force cuts in valuable services including schools.

Power companies have spent skillions of dollars buying heaps and heaps of coal. Yet they paid no sales tax, because of this handout.

One tax break for utilities was supposed to encourage utility firms to purchase pollution control equipment. But this break doesn't have this effect, because federal law (quite rightly) says they have to buy this equipment anyway.

Horse enthusiasts have spent oodles of dough buying expensive horses in Kentucky - some of which sold for millions of dollars. Yet they paid no sales tax on these major purchases.

And trucks that weigh over 44,001 pounds don't have to pay the vehicle use tax - even though these heavy trucks were a major factor in the state having to spend tax dollars on a costly US 27 upgrade.

These bailouts are expected to cost the state billions of dollars this fiscal year.

Kentucky lawmakers passed a law in 2005 requiring a legislative study of these tax breaks. Yet the study was never carried out. Thus, the law was violated outright.

Will Kentucky's tax disparities and corporate bailouts ever stop? I don't know. Maybe if lawmakers weren't busy passing social engineering legislation to police personal conduct and expand the failed War on Drugs, they could get to work on tax reform.

(Source: http://bluegrasspolitics.bloginky.com/2010/01/03/tax-breaks-a-major-drain-on-state-budget)