Kentucky Together: Partners in Economic Justice

A Tax Shift Will Hurt Our Commonwealth

Talking Points from Kentucky Together

Below are some ways to communicate the facts about tax shift plans with your friends, family and elected officials. We build thriving communities by investing in good schools, healthy families, modern infrastructure and other foundations of an economy that works for all Kentuckians. Giving away more tax breaks to powerful interests through a tax shift to a “consumption-based system” would gut investments in our Commonwealth by further reducing resources. We know what works in Kentucky to build thriving communities: investing in our Commonwealth. 

  • Kentucky is a Commonwealth because when we work together, we succeed together. When we all chip in with taxes for better schools, health care, roads and more, we all benefit.
  • We already spend too much on tax breaks – $12 billion in tax breaks compared to $10 billion in investments each year – and letting powerful interests insert more giveaways into our tax code for their own gain will further erode investments in things that benefit us all.

We face a choice: will we give more tax breaks to those at the top or protect investments in our schools, communities and our Commonwealth?

  • Current discussions by the Governor and legislature indicate their brand of tax reform – actually a “tax shift” – would put tax breaks for the wealthy before the strength of the Commonwealth.
  • A shift from income to sales taxes will leave us with less revenue for investments in thriving communities. Sales taxes don’t grow as well as income taxes do, meaning that even a vast sales tax expansion that initially generates new revenue will lead to even deeper underinvestment than we currently face.
  • Our tax system is already upside down, meaning people with the most pay the least: today, Kentucky families in the bottom 20% by income pay 9% of their income in state and local taxes while those in the top 1% pay only 6%. Shifting to a “consumption-based system” would make it even worse: Income tax cuts mainly benefit the wealthy and sales tax increases ask more of everyone else.
  • Sales taxes ask more of low to middle-income families as a share of their income than they do of the wealthy. In other words, sales taxes are “regressive,” affecting working families and people on a fixed income the most. This is especially true when it comes to sales taxes on groceries and prescription drugs, an option our leaders have said “is on the table.”

In short, a “Consumption-based” tax system won’t work for Kentucky.

  • Not Fair – Asks low and middle income Kentuckians to pay for tax cuts for the wealthy.
  • Not Adequate – Will not raise the revenue we need to support thriving communities.
  • Not Sustainable/Reliable – “Consumption-based” revenue declines over time, limiting options for future investments

Other states that have tried the kind of tax shifting Governor Bevin wants to pursue have experienced dramatic revenue losses, not economic boom. They have had to cut investments in K-12 schools, delay much-needed road repairs and projects, and have faced multiple credit downgrades.

  • Income tax cuts just don’t lead to the economic growth advocates promise. It’s common sense what income tax cuts lead to: less revenue for investments that benefit us all. There is no guarantee wealthy recipients would use tax breaks to hire Kentuckians, invest in a Kentucky enterprise or purchase goods in Kentucky. The revenue losses other states have experienced show that wealthy tax cut recipients save, spend or invest their money out of state. In short, income tax cuts do not lead to economic growth.
  • Four years after Kansas began its “real live experiment” of cutting taxes for wealthy and powerful interests, the damaging consequences – including a deeply underfunded education system the Kansas Supreme Court has ruled as unconstitutionally inadequate – provides a timely warning for Kentucky: this is not a path we should go down.
  • Art Laffer, the multi-millionaire architect of the disastrous Kansas tax cuts, and several of his out-of-state colleagues donated over $200,000 to Kentucky House candidates in 2016 in an effort to affect tax reform discussions.

Hint: Make the story your own! 

  • “I’m a grandmother in Perry County, and I want to make sure my granddaughter and every Kentucky kid goes to a great school. But without enough funding, we’re falling behind. We need textbooks, building repairs, and money to meet obligations to teachers who spend their lives educating our people. We don’t need a “consumption-based tax system” that piles on more tax breaks for the wealthiest Kentuckians and leaves our schools with even less to do their important work.
  • “My grandpa lived in Edmonson County until he was 103. He was able to live at home with assistance from Meals on Wheels. But there are many folks who have been waiting to get meals for years. We need better funding for this program to get more people off waiting lists so they can thrive at home like my Grandpa did. You’re not going to get there by giving tax cuts to wealthy folks.”

Topline Asks for Legislators:

  1. Will you commit to oppose any tax changes this year or during the 2018 General Assembly that shift taxes towards poor and middle class Kentuckians, give tax breaks to the wealthy and corporations, and leave us with less to invest?
  2. Will you commit to cleaning up expensive tax break

Resources for your pastoral role with persons in deep financial waters


By Dr. Marian McClure Taylor

I recently received a call from Richard Cordray, Director of theConsumer Financial Protection Bureau (CFPB). What I learned is timely at any point in the year, but especially at year's end when families are stretching themselves financially.

The CFPB, which opened its doors in 2011 following passage of Wall Street reform, is the first federal agency devoted to consumer protection in the financial marketplace. Director Cordray explained that the central mission of the CFPB is to make markets for consumer financial products and services work for all Americans. That includes mortgages, credit cards, student loans, payday loans, auto loans, bank accounts, credit reporting, debt collection, international money transfers and more.
Director Cordray described his appreciation for the role communities of faith play in building neighborhoods, supporting members, and when necessary, caring for people experiencing financial trouble. He echoed what many of us know: that communities of faith often serve as "first responders" when it comes to the financial security of families. At the level of state-wide organizations such as the Kentucky Council of Churches, faith communities also ask legislators and regulators for better policies to protect people and means of recourse for people who are harmed by predatory practices in the marketplace.
As a leader in churches and/or charitable service agencies, you might very well find yourself in situations where you could help people by sharing information about the interactive tools the CFPB has developed. These tools exist to help consumers get clear, unbiased answers to their financial questions and to get help when necessary. 
Below are links to the CFPB's web-based resources. Please share these. Some of the resources are designed to help families avoid or prevent financial mistakes. Others are for when the problem already exists.
Foremost among these is a groundbreaking consumer complaint system, where the CFPB can help anyone having trouble with a financial institution.  Director Cordray said that more than 300,000 American consumers have already made use of this system. 
You'll also notice item #7 is a link to an order form for free CFPB materials, which can be handed out in houses of worship or anywhere else.
By reaching out to faith communities as he is doing, Richard Cordray is both complimenting us and challenging us. God's blessings on you and your churches and organizations as you work to assist so many people who are struggling to get by on limited resources or who get in over their heads with financial dealings. May you find the resources listed below helpful as you do that.

Consumer Financial Protection Bureau (CFPB) Resources
You may view all these resources at 

  1. To file a complaint about consumer financial products or services (mortgages, credit cards, student loans, bank accounts, credit reporting, auto loans, debt collection, payday loans, money transfers, and more), visit the CFPB Consumer Response Center at or call 855-411-CFPB. The CFPB call center offers assistance in 189 languages. 
  2. To share a story - positive or negative - about a consumer financial product or service, visit "Tell Your Story" at 
  3. To find answers to questions about consumer finance, visit "Ask CFPB" at 
  4. To make informed decisions about paying for college, from comparing costs to repaying student debt, visit "Paying for College" at 
  5. To learn how to prevent elder financial exploitation and to view easy-to-understand booklets to help financial caregivers for older Americans, visit 
  6. To learn about financial resources and financial protection for servicemembers (armed forces), visit
  7. To order free CFPB publications in bulk for distribution to consumers, visit 
  8. To find the CFPB's Federal Register notices, as well as to read and submit public comments related to CFPB rulemakings, visit 
  9. To view the CFPB website in Spanish, visit 
  10. To connect with the CFPB on social media:

 You also may find many more resources at

God's Concern for People in Economic Jeopardy

God’s concern for the poor, the “widow and the orphan” and anyone treated unjustly translates into important priorities for the churches today. Together through the Council, Kentucky’s churches in recent years prioritize these issues: ending exploitative lending practices, stopping efforts to expand gambling casinos’ operations, establishing an Earned Income Tax Credit in Kentucky, and encouraging tax reforms that are sustainable and progressive.

Council finds payday loan interest rates “predatory” and calls for caps

Too many people are having to live from paycheck to paycheck, juggling difficult decisions about what bills to pay. Under such high-pressure circumstances it is not surprising that payday loans are seen as an attractive way to secure shelter, utilities and food for another week or two.

But when these kinds of loans go unregulated, a trap closes around the people who are most vulnerable. Usually they do not know the dimensions of the trap because no one explains the true amount of money they will really end up paying once they have repeatedly borrowed in this way. Most borrowers return at least six times.

Scriptures prohibit taking advantage of the poor, and specifically forbid usury against the poor (Exodus 22:25). Payday lending is the clearest form of usury against the poor that exists in our state. Payday loan rates in Kentucky exceed 400% APR. According to the Kentucky Coalition for Responsible Lending, each year an estimated 175,000 Kentucky families become ensnared in the payday loan debt trap, paying approximately $158 million annually in fees.

Local jurisdictions of 12 denominations serving nearly a million Kentuckians speak together through the Kentucky Council of Churches. We have issued a public statement calling for “limits or prohibition on predatory lending”. Our opposition to payday lending is in the larger context of our desire for a better life for people who are poor, especially a desire that they have wages they can live on, and access to quality, affordable health care.

We oppose predatory lending because it is counter to the care for our neighbors that God expects of us. This kind of lending cannot be described as aid, because true aid empowers persons to thrive and become responsible, contributing members of our community. Instead this kind of lending is a sinful exploitation of another person’s emergency, often leaving them much worse off.

We urge the faith community to support a cap on the interest rates that can be charged. The proposed cap of 36% will rank us with the states that are addressing this serious problem. In 2011, good progress was made toward this goal. Let’s keep working to educate Kentuckians so a cap can be instituted in 2012!

Stop the expansion of gambling

We seek to stop the expansion of gambling because it exploits people whose families can least afford the losses, fosters addictions and corrupts public decision-making. Recent research from health and social sciences only serves to heighten concerns as you will see if you read Why Casinos Matter at this link. Legislators and the press have repeatedly heard from the Council on this issue of economic justice because of our policy statements about gambling. Our member dioceses of the Catholic Church have offered their distinctive voice as well. Be sure your public officials hear from you too! On Kentucky Tonight (KET) in February 2012, KCC Executive Director Marian McClure Taylor expressed the opposition of churches to gambling; see especially minutes 15-17 on this KET video.

Establish an Earned Income Tax Credit

Together with the Kentucky Youth Advocates we encourage the public and our elected officials to consider the benefits for the working poor of having an Earned Income Tax Credit in Kentucky to mirror the successful program that lifts families out of poverty nationally. Please watch the Bread for the World video that helps to explain this idea's merits.

Bring about Tax Reforms

In 2012 a blue ribbon tax reform commission is studying ways to modernize the Commonwealth's tax system to take into account the shifts in the economy toward services, to consider what will attract more business investments and to provide a more adequate and sustainable flow of revenue to pay for necessary public services and programs. The Council works to make sure that the search for business competitiveness is enlightened by a broad acknowledgement of the link between human development (health, education, community life) and a good business environment. We also want to make sure the commission hears about the dire needs for help many families experience, and that the commission avoids tax approaches that give an undue share of burden to people who are struggling economically.