KEJA -- Tax Justice: Karen Mattingly

Fighting For Tax Justice in Kentucky

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

Karen Mattingly:

My name is Karen Mattingly. I am a member of Kentuckians for the Commonwealth. I currently live in Madison County.

Just a few years ago I had the honor of coming before you to ask for your support in making Tax Modernization fair for all Kentuckians. I am here today again to ask that you support the provisions in HB 411, provisions that move KY toward a more fair system and produce adequate revenue to invest in the services KY needs.

While this committee began the important work of moving our outdated system forward two years ago the work has only began.

What we’re doing as a state is not working. Not for All Kentuckians.

I am a professional educator at the elementary level. The single most important thing we can do is invest in human capital and prepare our children to participate and share in a prosperous future by providing an adequately funded educational system.

I have a six year old child who entered K last fall as one of 27 students in a class in a state that is 50th in per capita spending on education.
Despite the under funded schools, large class sizes, and inadequate resources my daughter will be OK. MY husband and I both have professional degrees in education. We’ll know when my child has not been challenged. We’ll know what areas to supplement and what concepts to enrich. And we’ll know how to do it.

But what about the child of a single parent who can barely read. Or the child who doesn’t get one nutritious meal a day because his parents are struggling to pay the rent. What about the child who spends a lot of time alone after school because her Mother works two jobs and can’t afford good daycare or even a babysitter.

Who will ensure his or her education is nurtured and enriched so that he or she can become one of the many educated Kentuckians moving KY forward as a value added citizen? An educated, informed citizen participating in the responsibilities and sharing in the prosperity that will make KY a stronger, better state?

What we’re doing as a state is not working. Not for All Kentuckians.

Current Policy has not only failed to create an adequate stream of revenue necessary for investing in our future it has failed to create a just system that asks for all to share in the responsibility to our communities in a fair way. Dana spoke of the difficulties brought by growing up in poverty.

Look at the chart which shows the impact of HB 411 on wage earners in KY. KY’s tax system is regressive.

If HB 411 were in place for this 2006 tax season, we could lesson the unfairness of our current system – we’d still be regressive, but the responsibility begins to spread in a more even way.

With HB 411 in place those in the two bottom quintiles would invest a slightly smaller percentage of their income in state and local taxes, the bottom quintile at just over 8 % of their income and the second quintile at about 9.5%. Those in the top 1% would invest almost 7% of their income in state and local taxes.Someone making $25,000 would invest about 9.5% of his income in state and local taxes keeping just over 90% while someone making $250,000 would invest just under 7.5% keeping just under 93% of the income.

The EITC component of HB 411 is primarily responsible for the improvement in the bottom two quintiles while the new rate brackets account for the slight increase at the top. The EITC is critical for moving the current system toward a more fair sharing of revenue responsibility. The EITC makes a huge difference for those who earn the least. In HB 411 the EITC is set at 15% of the federal EITC.

State EITCs target poor working families with the largest benefit going to parents of children earning between $10,000-$14,000, which is right around minimum wage. With the EITC from HB 411 those families would be refunded $680 of the money given in state and local taxes. Twenty states are now offering Earned Income Tax Credits, sixteen of those states have an EITC that is refundable, and four are adjacent to KY.

In Kentucky, more than 300,000 families would be eligible for the state EITC resulting in just under $95 million refunded to Kentucky’s struggling workers stimulating, local economies and offsetting rising costs of basic necessities such as food, housing, and utilities.

The EITC provides an incentive to work. Research has identified employment rates rising significantly for single mothers who were refunded money through the EITC and in 2003 Census Bureau data show that the EITC lifted 4.4 million people out of poverty. 2.4 million of those being children.

2.4 million children lifted out of poverty through the use of the EITC.
If we are to move KY forward in any meaningful way we need bold leaders willing to create institutional change …Bold leaders willing to choose and promote what is just and reach down to those on the lowest rungs of the economic ladder with a structural mechanism for climbing out of poverty and reaching economic success.

Please actively support the ideas advanced in HB 411, beginning with the EITC.

KY CAN do better. For All Kentuckians. Thank You.

This site was last updated on March 9, 2007