American Prospect: The Year of the Tax Cut

State lawmakers are also pointing to substantial, but temporary, budget surpluses to justify tax cuts, but these surpluses are “deceptive and fleeting,” says Neva Butkus of the Institute on Taxation and Economic Policy (ITEP), a Washington think tank. Twenty-three states lowered their revenue estimates compared to pre-pandemic levels, and 19 states counted delayed fiscal year 2020 tax collections as 2021 revenue, making current surpluses appear larger than they actually are.

These types of proposals mislead voters, shut down debate, and mask greater problems. Mississippi already has the highest poverty rate in the nation. Over 200,000 Mississippians remain uninsured because the state has not expanded its Medicaid eligibility under the Affordable Care Act. State tax cuts are also enacted at the expense of local governments, which are already struggling. With no other way to raise revenue, municipalities will be forced to increase fines and fees, according to ITEP’s Kamolika Das. These changes are always regressive, falling most heavily on low-income residents and people of color. Read morehttps://prospect.org/economy/the-year-of-the-tax-cut/