Once again: Revenue growth through tax cuts is a mirage

Kentucky has missed another trigger point in further lowering the state income tax. (Kentucky Lantern photo by Sarah Ladd) Nearly two years ago, I wrote in this publication that the Kentucky General Assembly’s faith in income tax rate cuts as a vehicle for generating revenue was a mirage. At the time, the state was preparing to cut the individual income-tax rate from 4% to 3.5% even as revenue was expected to decline. I argued that Kentucky was making a dangerous bet that reducing one of the state’s most productive and reliable sources of revenue would somehow generate enough economic growth to replace what the tax cut surrendered. Nearly two years later, members of the General Assembly have given us another opportunity to test that proposition.

Scoop News DeskKentucky · Published Wednesday, September 23, 2026 at 9:31 AM UTCUpdated Wednesday, September 23, 2026 at 10:48 AM UTC

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4, State Budget Director John Hicks sent a letter, the kind of letter that arrives at the office and immediately makes the rest of the day worse. But if paying for it means underfunding the very investments that make growth possible, you haven’t created growth; you’ve just moved money from one pocket to another and charged Kentucky’s future for the privilege. Nearly two years ago, I ended my column by warning that cutting the income tax from 4% to 3.5% amid declining revenue could prove reckless.

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