The Washington Post has denounced the inclusion of bonus depreciation in the just-passed tax extenders bill for 2014. The correct term is “partial expensing.” There is nothing “bonus” about it. The...
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- Top 10 State Tax Trends #6: Tax Abolition
Top 10 State Tax Trends #6: Tax Abolition
We've identified the top ten key tax trends among the states in recent years. We're sharing them with a short report each weekday with data and analysis on each trend. We hope this information will help you learn how states responded to the recession, how they're faring now, and how prepared they are for the future. The series kicked off last week with an overview of state budgets and state tax changes during 2011.
Our #6 trend, released in today's report (PDF), are efforts in some states to abolish an entire tax. Some highlights from the report:
- No state has repealed a major tax since the elimination of Alaska’s income tax in 1980, but North Dakota, Oklahoma, Kansas, and Missouri all seek to either reduce or eliminate a major tax, according to a new analysis by the Tax Foundation.
- While supporters tout the economic gains in eliminating an entire category of taxation, the question of how a state’s budget will cope with the loss of a major source of revenue is crucial to the ongoing reform debate.
- Supported by a 44% increase in tax revenue spurred by oil production, North Dakota will vote next week on a proposal to abolish its property tax.
- Oklahoma looks to reduce its income tax to a flat tax rate, and ultimately eliminate it, relying on a reduction of government spending to balance the budget.
- Kansas sought to increase revenue by eliminating tax code loopholes, while also restructuring and reducing income tax rates. Legislators recently passed a significant income tax cut.
- Missouri aims to eliminate its income tax and supplement an increased, revenue-neutral sales tax for the lost revenue. The proposal will not appear on this year's ballot but may return.
- If all proposals come to pass, an income tax-free zone could stretch from Texas north through Oklahoma and Kansas and east to Missouri.
If you'd like us to e-mail you these and all other Tax Foundation reports on state taxes, be sure to subscribe to our State Tax Fiscal Policy Reports and Releases e-mail list at http://taxfoundation.org/tax-foundation-e-mail-updates.
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About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.