Kentucky Lawmakers Propose Income Tax Reduction

As the 2025 legislative sessions begin across several states, Mississippi's leaders are focusing on tax cuts and Medicaid expansion amidst potential federal changes. The state is phasing in a substantial income tax cut, aiming for a flat rate of 4% by 2026, while House Speaker Philip Gunn proposes an eventual complete elimination of the income tax. In Kentucky, the General Assembly has introduced House Bill 1 to reduce the income tax from 4% to 3.5%, with concerns raised about the sustainability of previous tax cuts amid declining revenue forecasts. Missouri's legislators are also looking to cut income taxes, although there's a divide on which taxes to prioritize, with some advocating for cuts to sales taxes instead. All states face challenges balancing tax reform with budgetary constraints and differing priorities among lawmakers. As these sessions unfold, the impact of these proposed measures on residents and local economies remains to be seen.