KEJA -- Tax Justice: Dana Beasley Brown

Fighting For Tax Justice in Kentucky

Testimony in Support of HB 411 Fair & Adequate Tax Reform House Appropriations & Revenue Committee, 3/7/07

Dana Beasley Brown:

I’m Dana Beasley Brown, a member of the Economic Justice Committee of Kentuckians For The Commonwealth. I’m here today because, as someone who grew up very poor, I’m concerned that we aren’t doing enough to make our tax system fair and adequate.

Wealth inequality is a growing problem across the nation. According to the figures from the 2005 census, the percentage of poor Americans who are living in severe poverty has reached a 32-year high, millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen. Even Ben Bernanke, the Federal Reserve Chair, has been voicing concerns over the growing wealth divide.

This divide is glaring at us here in Kentucky. Last Sunday, the Herald-Leader reported that “Kentucky's deep poverty rate increased 26 percent from 2000 to 2005, adding 59,305 people to the ranks of the severely poor…. Kentucky's poverty rate, 16.8 percent, and deep poverty rate, 7.1 percent, for 2005 are both higher than the national averages.”

Are we doing everything we can to stop working people from living in poverty? Are we doing everything we can to make sure that Kentucky’s poor people don’t get shoved down into the depths of deep poverty?

I believe you are familiar with this graph. It shows, along the horizontal axis, Kentucky’s different income groups. The first four bars represent the poorest 20% of Kentuckians, the next poorest 20%, and so on. The top 20% of income earners in Kentucky are separated into the last three bars, which represent the top 15%, the top 4% and finally the top 1%. The height of each bar represents the percentage of personal income paid in state and local taxes. As you can see, Kentucky’s tax system is regressive. That is, it asks the most from those who have least, and asks the least from those who have most.

When I was growing up, my family was situated in this bracket, and sometimes in this bracket. My parents had six children, and my father worked very hard, but we could barely make ends meet. We lived frugally as a family of eight. All of us making sacrifices from which we now bare the scares. Growing up in poverty was grueling. I feel much older than my age from the stress of wondering if we would survive another day. I felt, very personally and deeply, what it meant to have financial obligations that we just couldn’t afford.

I’m telling you this because I’d like you to see another face of someone who can say that a fairer tax structure would have made life much more bearable. With respect, can each of you say that you are doing everything you can to keep Kentuckians out of deep poverty?

In 2005, this committee helped Kentucky modernize its tax structure. You accomplished some very important measures, and we know that our poorest Kentuckians, those living below the poverty line, are better off for them, and that the state is receiving some of the corporate taxes that it had not been from getting for so long.

But the wealth divide is still widening. We think that a fairer tax structure is one important way to start to close this gap. Whether you agree with that, or you think that education is the key to financial security, we still have plenty of work to do.

Kentucky’s budget isn’t keeping pace with the need to maintain its obligations to the people of this state. I’m sure many of you know the numbers about the many ways that the state is under-funding our public structures. The Boni Bill, which I know many of you are working on, has passed, but was inadequately funded despite the growing needs in social work. Our counties aren’t able to shoulder the costs of their jail systems, but they’re getting only gestures of help from the state.

But maybe the most significant indicator of our under-funded public structures is our education system. Our children are slipping further and further behind because schools can’t afford to give them the opportunities and tools to succeed. According to a 2005 report in Governing Magazine, Kentucky is 50th among states in per capita investing in education. In fact, Kentucky needs to invest an additional $337 million each year just to bring our per pupil investment up to the average of surrounding states.

HB 411, sponsored by Rep. Jim Wayne, provides an important model for this committee’s consideration. It demonstrates that an unfair and inadequate tax structure is not like the weather. It is a choice. And we urge Kentucky’s leaders to make better choices. HB 411 demonstrates that it IS possible to make Kentucky’s tax system more fair to working poor Kentuckians and raise needed revenue. It IS possible to reduce wealth inequality by establishing a state earned income tax credit and preserving Kentucky’s estate tax. It IS possible to ask a bit more from those who have received the greatest benefits from our society. And yes, it is possible for legislators to show leadership in support of fair and adequate taxes.

This legislation is rooted in the belief that all Kentuckians benefit from fairly funded and effectively designed public structures and services. We all need to commit to leading this state to a better path, not just as a committee, but as individuals. We’re not here to get this bill passed today. But that day is coming. We appeal to each of you to take up the challenge contained in HB 411 and show your leadership in moving Kentucky forward.

This site was last updated on March 9, 2007