‘We need more jam’

Editor’s Note: The Bluegrass Beacon is a weekly syndicated newspaper column posted on the Bluegrass Institute’s website after being published by newspapers statewide.

My late neighbor Hunter Vance’s political philosophy was that politicians – whether local magistrates or United States senators – should “put the jam jar on the lower shelf so the little man can get his.”

Barren County lawyer and former state representative Marion Vance – Hunter claimed him as a distant relative – even composed “Put the Jam on the Lower Shelf” as the campaign theme song for an unsuccessful U.S. Senate bid in 1961 recorded by Pat Kingery and His Kentuckians.

The YouTube version is scratchy but clearly speaks to the favored method of political campaigning throughout much of Kentucky’s history: “Now look good people you can see for yourself, Vance’ll put the jam on the lower shelf; Put the old age pension in the old folks’ hands, I tell you he’s the man, yes sir he’s the man.”

What happens, though, when the jam jar’s empty?

Elkton Republican and budget chair Jason Petrie’s House Bill 8 lays out a plan to create more jam in Kentucky by eliminating the state’s individual income tax within the next decade.

It starts by using accumulated surpluses from federal COVID relief funds and solid economic growth in recent years to immediately reduce the rate from the current 5% to 4% next year.

Future reductions will be triggered by continued growth in state revenues, ensuring adequate resources to cover the budget as income tax rates drop.

The legislation also expands the sales tax to include some luxury services.

States with which Kentucky competes for economic growth have lowered or eliminated income taxes and have produced a lot more “jam” than our commonwealth during the past half-century, although for Rep. Jason Nemes, a Louisville Republican and an attorney, it seems like the Bluegrass State’s been stagnant for at least twice as long.

“We don’t need to put the jar on the low shelf over and over again,” Nemes boomed in a speech during a House floor debate on creating a tax policy which rewards rather than punishes productivity. “We’ve been doin’ it for a hundred years. We need more jam in Kentucky.”

Nemes, who received a thunderous ovation for his comments, spoke after his obviously-confused colleague, Covington Democratic Rep. Buddy Wheatley, claimed, “my rationale tells me that a graduated income tax is the best way to even gain population.”

But the data doesn’t support Wheatley’s inner tax-hiking rationale.

Nemes pointed to Tax Foundation numbers indicating states with a 0% tax on income grow their populations twice as fast as the national average.

Kentucky only grew “a paltry 21% in its economy, its GDP, from 2000 to 2020 – that’s the third-worst in the country,” Nemes said, supporting his conclusion: “We need more jam.”

Rep. Michael Meredith, R-Brownsville, whose district sits mere miles from Tennessee – which has already virtually eliminated its income tax – talked about a “tale of two states over the last three or four decades.”

But his most effective narrative was a tale of two cities, noting that a half-century ago, the mirror- border communities of western Kentucky’s Hopkinsville and Clarksville, Tenn., each had the same number of residents – 25,000 according to Census numbers.

Those Census numbers now report that Clarksville has nearly 167,000 residents, which, as Meredith noted, would be the third largest city in Kentucky if it were within our borders.

Hopkinsville added just over 6,000 residents compared to Clarksville’s whopping population growth of nearly 142,000 during the same period.

“The people choose to live in Tennessee because they have a tax code that promotes that growth, and that population growth,” Meredith said.

Hopkinsville and Clarksville were also the same size back when Kingery crooned: “Put Vance in office, he’ll stand the test; smear the jam around the little man’s nest.”

By moving in the direction of eliminating the income tax, expanding the sales tax to nonessential services – all while avoiding taxes on groceries, utilities and medicine – Kentucky will create more jam, spread it around the little man’s nest while many more “birds” come and many more nests get built.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free market think tank. Reach him at jwaters@freedomkentucky.com and @bipps on Twitter.