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Economics

Issue Brief on Topics Affecting Kentucky’s Economy

Revenue

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How To Raise State Revenue Without Raising Taxes, Christopher R. Bollinger Oct 2015

How To Raise State Revenue Without Raising Taxes, Christopher R. Bollinger

Issue Brief on Topics Affecting Kentucky’s Economy

A positive relationship exists between educational attainment and earnings, which has been well established in the literature through multiple studies. This, in turn, influences the revenues generated for the state of Kentucky through the personal income tax. We predict even the modest change of increasing Associate’s and Bachelor’s degree holders by 1% would increase revenue by $37 million. Kentucky loses between $300 million and $500 million in state tax revenues every year because our educational attainment is lower than the national average.