Timothy Vermeer was a Senior Policy Analyst with the Center for State Tax Policy at the Tax Foundation.
Research almost invariably shows a negative relationship between income tax rates and gross domestic product (GDP). Cuts to marginal tax rates are highly correlated with decreases in the unemployment rate.
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Arizona now joins a growing cohort of states that are moving toward a flat income tax. Pending revenue triggers, the income tax rate will be reduced to 2.5 percent giving Arizona one of the lowest individual income tax rates in the country.
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Mississippi policymakers delivered the largest tax cut in state history, providing meaningful relief for taxpayers by cutting individual income tax rates.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
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Not only is the tax inequitable and inefficient, it also could be what drives businesses and remote workers into another state.
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Before declaring victory, it is imperative to get the details right. The latest proposal is a drastic improvement over the last one, but there is still more work to be done if the Magnolia State is to sustain the intended transformation.
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Well-designed Net Operating Loss (NOL) provisions benefit the economy by smoothing business income, which mitigates entrepreneurial risk and helps firms survive economic downturns.
24 min read
Twenty-one states and D.C. had significant tax changes take effect on January 1, including five states that cut individual income taxes and four states that saw corporate income tax rates decrease.
17 min read
Faced not only with immediate surpluses but with the expectation of sustained revenue growth in coming years, Arkansas policymakers have chosen to return some of the additional revenue to taxpayers in the form of individual and corporate income tax rate reductions, with additional rate cuts if future revenues permit.
6 min read
Mississippi lawmakers should deliver tax relief in 2022, but they need not take an all-or-nothing approach. There are many ways to improve the state’s tax code, even if full income tax repeal doesn’t remain on the table.
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Our new study identifies a number of deficiencies in Oklahoma’s tax code and outlines possible solutions for reform that would create a more neutral tax code and encourage long-term growth in the state.
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Through 10 ballot measures across four states—Colorado, Louisiana, Texas, and Washington—voters will decide significant questions of state tax policy.
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Florida is now the ninth state to implement or adopt a corporate income tax cut in 2021, with the state’s new rate the nation’s second lowest—for now.
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