- Associated Press - Tuesday, February 4, 2014

Gov. Steve Beshear announced his plan Tuesday to modernize Kentucky’s tax code. The recommendations include:

-Reducing individual income tax rates.

-Creating a refundable earned income tax credit targeted to low-wage earners.

-Lowering the top corporate income tax rate to 5.9 percent from 6 percent.

-Expanding the state’s research and development tax credit.

-Exempting inventory from state property tax.

-Creating an income tax credit for the bourbon industry.

-Exempting sales and use tax on certain equine products.

-Lowering wholesale tax on beer, wine and distilled spirits.

-Increasing state cigarette tax to $1 per pack.

-Increasing tax rate on other tobacco products, commensurate with cigarette rate increase.

-Creating tax on e-cigarettes.

-Broadening the state sales tax to selected services.

-Reducing retirement income exclusion for taxpayers with income of more than $80,000. Phasing it out for income over $100,000.

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