Lawmakers will enter the 2025 fiscal legislative session with an opportunity to build on the successes of the November special session. Efforts should include addressing the outstanding issues within the corporate and sales tax codes that currently hold the state back.
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Next year, West Virginians will see an income tax cut thanks to revenue triggers in a 2023 law. The Mountain State joins 14 other states that have cut income taxes this year.
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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. How do income taxes compare in your state?
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In 2021 and 2022 alone, more states enacted laws converting graduated-rate individual income tax structures into single-rate income tax structures than did so in the whole 108-year history of state income taxation up until that point.
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After years of strong revenue growth, Kansas has substantial cash reserves on hand, and policymakers on both sides of the aisle have expressed a desire to return some of the extra revenue to taxpayers.
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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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What historical lessons of wartime finance can Ukrainian and EU policymakers learn to put Ukraine’s economy on a path to success during, and especially after, the war?
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Income taxes impose steeper economic costs, and often steeper administrative and compliance costs, than consumption taxes. Moving to a consumption tax would end the tax bias against saving and investment and provide an opportunity to greatly simplify anti-poverty programs embedded in the tax code.
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This tax reform plan would boost long-run GDP by 2.5%, grow wages by 1.4%, and add 1.3M jobs, all while collecting a similar amount of tax revenue as the current code and reducing the long-run debt burden.
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As fiscal year 2023 draws to a close, North Carolina’s House and Senate have each passed their own versions of the biennial budget for fiscal years 2024-25. While legislative leaders have generally agreed to overall spending levels, negotiations remain ongoing to resolve different approaches to tax policy.
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Rather than continue down the path of growing debt, lawmakers should craft a comprehensive solution. International experience cautions against tax-based fiscal consolidations, but modest tax increases may be part of a successful debt reduction package.
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When a country has a broad base with a simple and transparent tax code, small rate changes have little influence. Therefore, policymakers shouldn’t only focus on rate changes when it comes to increasing tax competitiveness.
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The changes put forth in a new package of bills would represent significant pro-growth change for Oklahoma that would set the state up for success in an increasingly competitive tax landscape.
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The proposed reforms would be welcome changes to the Commonwealth’s tax code, but the economic principles behind the reforms also have important implications for the Bay State’s income tax system writ large.
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As Kansas legislators consider additional tax policy changes this legislative session, they should prioritize economic growth and a structurally sound tax code.
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Crafting a hybrid bill for a low, flat rate on a broad base—with well-designed revenue triggers to responsibly reduce rates in the future—could be an ideal way forward for the North Dakota Senate.
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By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.
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Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.
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On Election Day, a narrow majority of Massachusetts voters approved Question 1, also known as the Fair Share Amendment, which will transition the Commonwealth from a flat rate individual income tax to a graduated rate system.
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