Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Due to the peculiar design of the proposed tax increase, it’s true: the largest tax increase Oregon has ever seen would create a substantial budget shortfall.
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Focusing on competitiveness, neutrality, and efficient policies to raise revenue would go a long way in increasing economic growth and stabilizing public finances over the long term.
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Under the tax created by Measure 118, Oregon businesses would be significantly disadvantaged against their larger and out-of-state rivals.
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Oregon’s Measure 118, though presented as a tax on big business, would function as an aggressive sales tax on consumers.
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Taxes are on the ballot this November—not just in the sense that candidates at all levels are offering their visions for tax policy, but also in the literal sense that voters in some states will get to decide important questions about how their states raise revenue.
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The sales tax is the second-largest source of state tax revenue and an important source of local tax revenue, but decades of base erosion threaten the tax’s share of overall revenue and have prompted years of countervailing rate increases.
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The proposal is a good example of what can be done to reduce tax burdens on residents if spending is constrained. There are real, tangible benefits associated with enacting this pro-growth reform that should not be discounted.
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The data extraction mitigation fee is modeled after Maryland’s digital advertising tax, which has been mired in litigation since its inception and is very likely unconstitutional and in conflict with federal law.
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The all-in Oregon state and local tax rate on large businesses could exceed 56 percent under a proposed ballot measure that purports to impose only a small tax increase on large businesses.
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Gross receipts taxes impose costs on consumers, workers, and shareholders alike. Shifting from these economically damaging taxes can thus be a part of states’ plans for improving their tax codes in an increasingly competitive tax landscape.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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One particular provision of the Biden administration’s proposal to ban so-called “junk fees” would have unintended consequences.
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As policymakers continue efforts to improve Kentucky’s tax structure and competitiveness, they should keep in mind that not all offsets are created equal.
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Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
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While some recommendations follow the principles of sound tax policy and may improve the District’s tax climate, some proposals make the tax code more complex and less neutral, potentially disincentivizing investment and business activity.
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Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).
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Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.
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In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.
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