Help me understand Louisville's high tax burden on its residents (Lexington-Fayette: sales, 2013)

[Alpha_Dog]

Apparently Louisville taxpayers have one of the highest state and local tax burdens in the nation. A family of three spends around 12.6% of their income on state and local taxes -- an average of over $6,000 per year.

This rate seems pretty high especially compared to other cities like Nashville, Houston, and Austin. Am I missing something here, are these numbers correct? Would the tax burden be roughly the same rate in surrounding KY counties, like Oldham?

Thanks in advance!


Louisville’s taxes are the 4th highest in the nation Louisville

10 U.S. cities with the highest taxes http://www.marketwatch.com/story/10-...xes-2013-03-02

[blisstone]

Techwired,

So I read this article,

http://www.examiner.com/article/loui...est-the-nation

and had a brief moment of panic at the tax rates... but then I realized that I am single and this taxation system really hurts the people with children the most. I feel somewhat better, but still consider it unfair that those with kids don't get a break.

First this is the occupational licensing fee that all people who work in L. have to pay. Notice that there is a resident and non-resident structure.

There are actually three (3) different occupational license fees/taxes collected by the Revenue Commission

Louisville Metro, Kentucky, imposes a license tax of 1.25% (.0125)
Jefferson Co. or Anchorage School Boards impose a license tax of .75%
Exception: Non-resident employees and non-resident, self-employed individuals are not required to pay the School Board license tax.
Transit Authority of River City (TARC) imposes a license tax of 0.2% (.0020)

The total amount of this OLF is 2.2% max if you live and work in L. (if you live in L. but work out of the city limits you don't pay this tax.)

Second in reading the article (and correct me if I am wrong) it seems that the 14.4% tax burden referred to in the articles includes the amount of sales tax a family of 3 will have to incur. Which would include all the things and victuals one has to buy for a child who is not a wage earner (hopefully).

But, this video says it is L. income tax which is the whammy.

http://insiderlouisville.com/busines...-city-chicago/

and here are the rates for KY income tax:

http://www.bankrate.com/finance/taxe...-kentucky.aspx

I read that property tax is 1% of market value (seems low to me).

Then I see that the license registration fee is 6% (I don't know if that's high as I don't own a car).

Hope this helps and hope residents pipe in on this since I am curious how it all plays out in your day to day.

Bliss, out.

[Alpha_Dog]

Originally Posted by blisstone

Techwired,

So I read this article,

Louisville

and had a brief moment of panic at the tax rates... but then I realized that I am single and this taxation system really hurts the people with children the most. I feel somewhat better, but still consider it unfair that those with kids don't get a break.

First this is the occupational licensing fee that all people who work in L. have to pay. Notice that there is a resident and non-resident structure.

There are actually three (3) different occupational license fees/taxes collected by the Revenue Commission

Louisville Metro, Kentucky, imposes a license tax of 1.25% (.0125)
Jefferson Co. or Anchorage School Boards impose a license tax of .75%
Exception: Non-resident employees and non-resident, self-employed individuals are not required to pay the School Board license tax.
Transit Authority of River City (TARC) imposes a license tax of 0.2% (.0020)

The total amount of this OLF is 2.2% max if you live and work in L. (if you live in L. but work out of the city limits you don't pay this tax.)

Second in reading the article (and correct me if I am wrong) it seems that the 14.4% tax burden referred to in the articles includes the amount of sales tax a family of 3 will have to incur. Which would include all the things and victuals one has to buy for a child who is not a wage earner (hopefully).

But, this video says it is L. income tax which is the whammy.

MarketWatch: Report ranks Louisville taxes higher than New York City, Chicago or LA | Insider Louisville

and here are the rates for KY income tax:

State taxes: Kentucky | Bankrate.com

I read that property tax is 1% of market value (seems low to me).

Then I see that the license registration fee is 6% (I don't know if that's high as I don't own a car).

Hope this helps and hope residents pipe in on this since I am curious how it all plays out in your day to day.

Bliss, out.

That's very helpful Bliss and I appreciate your insight.

My wife and I have a seven year old which would make us dual income with one kid. It looks like the personal income tax runs 5.8 percent in KY on taxable income between $8,001 and $75,000, and 6 percent on taxable income of $75,001 and above, which isn't horrible but but still 6% higher than the zero percent we paid when living in Austin. The article you linked regarding Louisville taxes stated “Depending on a family’s income, Louisville has either the second or third highest income tax among all cities.” Taxes for family earning $25,000: $3,594 (8th highest) Taxes for family earning $150,000: $18,008 (5th highest) -- This still seems VERY high for a Southern city.

[blisstone]

On the subject of taxes I would like to know if the situation is similar for business owners, in terms of being very high in comparisons to other cities of similar sizes.

[Crazee Cat Lady]

It's not so much that (Louisville ) Kentucky has a high tax rate, but Texas has one of the lowest in the nation.

States with the highest and lowest taxes

Kentucky is not listed as one of the top ten states with high taxes, Kentucky is nowhere on the list, but Texas is on the list for having one of the lowest in the country. So most US cities will have a higher tax rate.

I have lived in Lexington, Louisville, and Baltimore as an adult, and it seems like Baltimore had higher taxes to me, but maybe that was only perceived so, on my part. I never really did a side by side comparison.

Total overall cost of living I believe is cheaper in Kentucky though. Here is a calculator where you can compare col costs from one city to another.

Cost of Living Calculator: Compare the Cost of Living in Two Cities - CNNMoney

When compared to Austin, a family in Louisville would pay one percent more for groceries, and three percent more on transportation...but pay 5 percent less on housing and utilites and 7 percent less on health care.

[The Dissenter]

I would put Louisville in the middle of the pack for taxes. I live in Virginia now and wish I was paying Kentucky personal property tax on my car. I paid $345 for a $16000 car last year. If I was living at mom's house in KY, I would be paying $182 this year (disclaimer I used Hardin County's and not Jefferson County's tax estimator.)

[Alpha_Dog]

Originally Posted by Crazee Cat Lady

It's not so much that (Louisville ) Kentucky has a high tax rate, but Texas has one of the lowest in the nation.

States with the highest and lowest taxes

Kentucky is not listed as one of the top ten states with high taxes, Kentucky is nowhere on the list, but Texas is on the list for having one of the lowest in the country. So most US cities will have a higher tax rate.

I have lived in Lexington, Louisville, and Baltimore as an adult, and it seems like Baltimore had higher taxes to me, but maybe that was only perceived so, on my part. I never really did a side by side comparison.

Total overall cost of living I believe is cheaper in Kentucky though. Here is a calculator where you can compare col costs from one city to another.

Cost of Living Calculator: Compare the Cost of Living in Two Cities - CNNMoney

When compared to Austin, a family in Louisville would pay one percent more for groceries, and three percent more on transportation...but pay 5 percent less on housing and utilites and 7 percent less on health care.

That's very helpful Crazee! Does anybody who's lives in the area know if the tax burden in Jefferson County is roughly the same as in surrounding KY counties, like Oldham or comparable to Lexington - Fayette County region? Texas does have VERY high property taxes, close to 3%.

[Crazee Cat Lady]

Originally Posted by Alpha_Dog

That's very helpful Crazee! Does anybody who's lives in the area know if the tax burden in Jefferson County is roughly the same as in surrounding KY counties, like Oldham or comparable to Lexington - Fayette County region? Texas does have VERY high property taxes, close to 3%.

Thank you. (I have always thought I had to pay too much tax, where ever I have lived though!)

Kentucky: Eight cities in kentucky levy income taxes on residents and non-residents. They are: Bowling Green (1.85%), Covington (2.5%), Florence (2%), Lexington-Fayette (2.25%), Louisville (2.20% for residents and 1.45% for non-residents), Owensboro (1.33%), Paducah (2%), and Richmond (2%). Lexington-Fayette Urban County Government and Louisville - Jefferson County also impose taxes on businesses.
City Income Taxes - U.S. Cities With an Income Tax

Kentucky ranks number 23 as far as the tax burden goes (number one being the state with the biggest burden).

Kentucky's State and Local Tax Burden | Tax Foundation

[Crazee Cat Lady]

^And yes you pay significantly less on taxes in rural areas in most cases. Lower property taxes also.

[JamesConrad]

High taxes, blame crazy *******s in Jeff. County. Too many loonies here and yet they keep voting for loons like the current people in Jeff. County. Have you bothered to look at Yarmuth? What a douche.