"h" wrote in message
...

Actually Tony's claim would be accurate for Kentucky based banks. Funds
on deposit in banks located in KY were exempt from the tax. The banks
were required to pay the tax but not the depositor.

Money in out of state banks, money market funds, stocks and bonds were
all taxed.

I think it was that exemption that helped in the over-turning of this
onerous tax.


So...they were taxing the same money every year? Why would anyone ever
deposit their money in an out-of-state bank if that were the case? Is that
what the law was designed to do? Get people to deposit their money in
Kentucky banks? Seems completely crazy to me.


Absolutely. The state and local leeches have never met a tax they did not
like.

Because at that time money markets and out of state banks were paying a
higher yield than in state banks. If you could beat the in state yield by
more than a 1/4 point (the tax rate) then you still came out ahead. There
were times when an out of state CD might be may a full point more than an in
state one.

Colbyt