Blog - Personal Income Taxes
65 posts
From Congressional discussions over the so-called "One Big Beautiful Bill Act" to debates on property taxes, ITEP kept busy this year analyzing tax proposals and showing Americans across the country how tax decisions affect them.
State Tax Action in 2025: Amid Uncertainty, Tax Cuts and New Revenue
July 28, 2025 • By Aidan Davis, Neva Butkus, Marco Guzman
Federal policy choices on tariffs, taxes, and spending cuts will be deeply felt by all states, which will have less money available to fund key priorities. This year some states raised revenue to ensure that their coffers were well-funded, some proceeded with warranted caution, and many others passed large regressive tax cuts that pile on to the massive tax cuts the wealthiest just received under the federal megabill.
The idea of exempting overtime pay from income tax has gained traction, but there's little evidence it's an effective policy. Alabama tried it in 2023 but ended the policy after just two years. Their reversal highlights how exempting overtime is an expensive gimmick and a distraction from real worker issues.
North Carolina Tax Proposal Prioritizes Millionaires Over Everyone Else
June 11, 2025 • By Dylan Grundman O'Neill, Miles Trinidad
North Carolina Senators are proposing to yet again ignore the core needs of the majority of North Carolinians in favor of more income tax cuts for the wealthy few. The Senate's budget would take the personal income tax rate to 1.99 percent as soon as 2031 if certain revenue triggers are met, once again delivering billions of dollars in tax cuts mostly to the rich. And the cost of those tax cuts for North Carolina will be steep cuts to the state’s future, including public education and community colleges.
Amid Economic Uncertainty, Delaware Lawmakers Should Consider Progressive Revenue Proposals
June 4, 2025 • By Miles Trinidad
Delaware leaders cited the ongoing federal tax debate and economic uncertainty amid the Trump administration's tariffs and trade wars as reasons to delay pursuing some of the progressive tax increases that Gov. Matt Meyers proposed in recent months. But just the opposite is needed. Delaware lawmakers should advance tax policies that can simultaneously protect state revenue to fund important priorities and improve tax equity in the state ahead of the approaching fiscal storm.
Tip Exemptions Have No Place in State Income Tax
March 25, 2025 • By Eli Byerly-Duke, Nick Johnson
Creating a special tax break for tipped income – as at least 20 states are considering this spring – would harm state budgets, encourage tax avoidance, and fail to reach the vast majority of low- and middle-income workers.
Mississippi Considers Deep Tax Cuts Amidst Budget and Economic Uncertainty
February 26, 2025 • By Neva Butkus
At a time when states across the country are forecasting deficits or anticipating slowing revenue growth, Mississippi lawmakers are debating deeply regressive and expensive tax cuts that would overwhelmingly benefit their state’s richest residents.
Turning IRS Agents to Deportation Will Reduce Public Revenues
February 11, 2025 • By Carl Davis, Jon Whiten
The Trump Administration’s plan to turn IRS agents into deportation agents will result in lower tax collections in addition to the harm done to the families and communities directly affected by deportations.
Maryland Gov. Wes Moore’s Tax Plan Boosts Revenue, Increases Fairness
January 30, 2025 • By Miles Trinidad, Nick Johnson
Maryland’s Gov. Wes Moore put forward a tax reform plan that would make the tax system fairer, simpler, and better able to meet the state’s needs. The proposed changes to the income tax ask more of those at the top and provide an average tax cut for those earning less.
Louisiana Gov. Jeff Landry called the legislature back to the capitol the day after the national election to take up his plan to overhaul the state’s tax system during a 20-day special session. Our analysis shows the tax overhaul would worsen the inequity already rampant in Louisiana’s tax system while potentially shortchanging essential services for families across the state.
Average Louisianans Will Pay for Gov. Landry’s Tax Break for the Rich
November 26, 2024 • By Neva Butkus
Tax cuts for the wealthy and corporations will not make Louisiana more competitive. Rather, they will blow a hole in the state budget while asking low- and middle-income working families to make up the difference. Gov. Landry and the Louisiana legislature would make much better use of their time looking for ways to make Louisiana’s tax structure fairer and more capable of adequately funding important priorities.
State Tax Policy Should Adopt the Principles of ‘Black Women Best’
November 20, 2024 • By Brakeyshia Samms
Focusing policy analysis on Black women illustrates how Black women have long shouldered the shortcomings of the economy and clearly points to solutions that work for all. Black women are at their best when they are financially secure, healthy, and free – and our economy is at its best when all people can thrive and benefit.
Major tax cuts were largely rejected this year, but states continue to chip away at income taxes. And while property tax cuts were a hot topic across the country, many states failed to deliver effective solutions to affordability issues.
Reality Interrupts the Fever Dream of Income Tax Elimination in Kentucky
June 27, 2024 • By Eli Byerly-Duke
Keeping the Kentucky income tax on a march to zero would mean tax hikes for working families or widespread cuts to education, health care, and other public services. Reversing course is certainly the wiser course of action.
States Should Opt Into IRS Direct File as the Program is Made Permanent
May 30, 2024 • By Jon Whiten
While there is plenty of room to expand Direct File at the federal level, states can take matters into their own hands and bring this benefit to their residents by opting into the program.
There are a variety of factors that affect teacher pay. But one often overlooked factor is progressive tax policies that allow states to raise and provide the funding educators and their students deserve.
Iowa Flat Tax Shows Why Such Policies Are a Problem Everywhere
May 9, 2024 • By Eli Byerly-Duke
As Iowa lawmakers change the state’s graduated personal income tax to a single flat rate, they are designing a state tax code where the rich will pay a lower rate overall than families with modest means.
These forward-thinking states are demonstrating the wide variety of options for policymakers who want to raise more from the wealthiest people, rein in corporate tax avoidance, create fair tax codes and build strong communities.
Governors and legislative leaders in a dozen states have made calls to fully eliminate their taxes on personal or corporate income, after many states already deeply slashed them over the past few years. The public deserves to know the true impact of these plans, which would inevitably result in an outsized windfall to states’ richest taxpayers, more power in the hands of wealthy households and corporations, extreme cuts to basic public services, and more deeply inequitable state tax codes.
Some states have improved tax equity by raising new revenue from the well-off and creating or expanding refundable tax credits for low- and moderate-income families in recent years. Others, however, have gone the opposite direction, pushing through deep and damaging tax cuts that disproportionately help the rich. Many of these negative developments are quantified in […]
Tax Cuts Fail Again in Kansas and Wisconsin; Lawmakers Should Pivot to Proven Investments
March 6, 2024 • By Neva Butkus
The governors of both Kansas and Wisconsin recently stood up to legislators who tried to push through costly tax cuts that would overwhelmingly benefit the most well-off. Lawmakers in those states and others should shift their focus from expensive, top-heavy tax cuts to tried and true policies that help middle-class and low-income families.
While many state lawmakers have spent the past few years debating deep and damaging tax cuts that disproportionately help the rich, more forward-thinking lawmakers have improved tax equity by raising new revenue from the well-off and creating or expanding refundable tax credits for low- and moderate-income families.
The ‘Low-Tax’ Lie: States Hyped for Low Taxes Usually Only Low-Tax for the Rich
February 20, 2024 • By Jon Whiten
It’s hard to go a week without seeing a politician or a news article hype up a state as the place that everyone is moving to – or should move to – because of low taxes. However, there’s a big problem with these proclamations: they aren’t true.
Latest Kansas Tax Plan Would Provide an Estimated $875,000 Tax Cut to Charles Koch
January 22, 2024 • By Carl Davis, Neva Butkus
Last week, both houses of the Kansas legislature approved a significant tax cut centered around replacing the state’s graduated rate income tax structure with a flat tax instead. The bulk of this would flow to upper-income families, mostly through lowering the state’s top income tax rate from 5.7 to 5.25 percent. This tax cut would […]
Eliminating Indiana’s Income Tax Would Jeopardize Public Services & Create a Windfall for the Well-Off
October 19, 2023 • By Neva Butkus
Meaningful investments in Indiana’s future require a smart, and fair, tax code that recognizes current economic realities and can raise a sustainable stream of funding from those most able to pay.
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