HOWARD — In order to forestall a projected $1.2 million deficit for fiscal year 2011, the East Knox school board on Wednesday passed a resolution to place a five-year, 1 percent earned income tax levy on the May 4 ballot to help pay for the district’s operating expenses.
Board members said the board chose the earned income tax option because it is considered to be a fairer way for local communities to support their schools. The earned income tax is based only on earnings, not property. It does not negatively impact retirees or others on fixed incomes, as it does not tax dividends, capital gains, pensions, Social Security, survivor benefits or inheritance. Based on federally adjusted gross income, the tax can be withheld throughout the year through payroll deduction, spreading the payments out over time instead of requiring a larger lump sum payment at once. If an individual’s income or farm revenue decreases, the tax decreases.
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