Last week, the American Legislative Exchange Council and Arthur Laffer, Ph.D. released the sixth edition of “Rich States, Poor States,” a report which analyzes the economic competitiveness among the states on two fronts: economic performance and economic outlook.
Unfortunately for Kentuckians, the commonwealth’s economic outlook remains relatively unchanged from last year’s report, near the bottom of the pack at No. 38.
What is responsible for Kentucky’s dismal economic outlook? The usual suspects are to blame:
- Kentucky ranks No. 42 for top marginal personal income tax rate at 8.20 percent.
- Kentucky levies a significant estate/inheritance tax.
- Kentucky ranks No. 38 for tort litigation fairness and judicial impartiality.
- Kentucky has yet to pass right-to-work legislation
- Kentucky ranks dead last for debt service as a share of tax revenue.
It’s a business-friendly climate of low taxes, little debt, and the freedom of employees to work without forced unionization that attracts much needed capital to the commonwealth. This capital is the key ingredient for economic growth and increased prosperity for Kentuckians. Though ALEC-Laffer did acknowledge Kentucky’s attempt at public pension reform, our economic outlook ranking reflects a lack of some vital ingredients toward economic growth, and results in states like Tennessee out-pacing us for opportunity.
Kentucky’s economic performance over the past ten years was ranked at a mediocre No. 29