Eastern Kentucky has more than 25 counties with unemployment rates above 10 percent. The region as a whole is well above the national average. According to the most recent data, Floyd County has an unemployment rate of 11.4 percent.
Long-term unemployment is a chronic problem in Eastern Kentucky. High tax rates, EPA regulations and the war on coal have decimated the region. I’ve seen it firsthand when I’ve been in Eastern Kentucky and I’ve listened to Kentuckians express their deep frustrations.
For 50 years, government has fought a War on Poverty with government programs and taxpayer money. Press and pundits can debate its legacy, but what’s obvious is that there is no economic dynamism in Eastern Kentucky. And it won’t come from another government check or a stimulus program that picks winners and losers.
What will provide more opportunity to Eastern Kentucky is a different kind of stimulus—one that leaves more money in the hands of people who have earned it. That’s what I’m proposing.
Economic Freedom Zones will reduce taxes and burdensome regulations in economically depressed areas.
Economic Freedom Zones are not a government stimulus, but rather a free market stimulus. Government does not pick the recipients of grants—the consumer chooses which businesses succeed and Economic Freedom Zones then leaves money in Eastern Kentucky, in the hands of those who earned it.
My proposal promotes job creation by reducing taxes. Both the individual income tax and corporate tax is reduced to a single, flat rate of five percent. The payroll tax rate is reduced by two percent for both the employer and employee.
Economic Freedom Zones also provide educational enhancements to build a strong workforce. Parents and students receive more flexibility and options through school choice, including an educational tax credit.
I am also proposing that we reduce the regulatory burden imposed by the EPA, as well as encourage community rebuilding by repealing prevailing wage requirements and expanding the charitable tax credit.
Eligible areas (city, county or municipalities that are impoverished or bankrupt) could utilize this plan for a period of 10 years. My Economic Freedom Zones plan would leave $33.3 million in Floyd County over the next decade.
I don’t think there is a problem or a challenge that the people of Kentucky can’t meet. When I travel the Commonwealth, I am always inspired by our tough spirit and backbone.
That’s why I want to leverage the human capital, natural resources and business investment opportunities that already exist and give Kentuckians the power to confront and overcome hardship and unemployment.
There are creative solutions for our schools and our communities. We should have the power to try them.
This region and the challenges facing it have been getting a lot of attention. I was recently at the White House to hear about the President’s plan to give Eastern Kentucky a leg-up when applying for federal grants and loans. And there are other sincere efforts aimed at stoking discussion and ideas.
We all know what we face, and everyone knows we have to act. For 50 years, we have tried government grants, but it’s about time we try something new. I believe economic Freedom Zones can make a huge difference.
I have no doubt that there is a prosperous future for Eastern Kentucky. This plan will enable and empower us to make it a reality.