Income Taxes

Most states are adopting a very cautious approach so far this year as legislators begin their sessions and governors make their annual addresses, thanks to ongoing economic uncertainty and federal retrenchment.

They should take steps to protect and boost their own revenues. And they should take a second look at their own tax cuts.

State governors are beginning to lay out their top priorities as legislatures reconvene in statehouses around the country.

This provision in last summer’s tax law could actually make budget-balancing a little bit easier for states if they follow suit.

Missouri lawmakers have been pushing regressive and shortsighted tax policies that undermine everyday workers and sabotage the Show-Me State’s ability to raise revenue.

As we kick off a new year, several states are facing revenue shortfalls. Some lawmakers are approaching the challenge with sustainable and equitable solutions.

State deductions for tips and overtime are not only ineffective at supporting working-class people, it will come at a substantial cost to state budgets.

An unknown number of workers who previously were assumed to be ineligible for the tax break may nonetheless claim it.

A costly tax break for wealthy venture capitalists is drawing some critical attention from state policymakers.

Some states continue to hand out huge tax cuts to millionaires. The five largest tax cuts this year will cost states a total of $2.2 billion per year once fully implemented.

Maryland is taking aim at income and racial disparities through a revised personal income tax. By raising taxes on high earners and cutting them for most households across racial and ethnic lines, the state is proving that progressive tax policy can drive both equity and revenue.

The megabill will raise taxes on the poorest 40 percent of Americans, barely cut them for the middle 20 percent, and cut them tremendously for the wealthiest Americans next year.

This country’s biggest historical challenge has been delivering this progress to all Americans, but Republicans have cut it back for everyone, retreating from many 20th century achievements in ways that will slam doors, rather than opening them, for the next generation.

$117 billion is a big number, so we thought it could use a little context.

Congress and the president could have spent less than half that much money on a tax bill that does more for working-class and middle-class households.

President Trump has signed into law the tax and spending “megabill” that largely favors the richest taxpayers and provides working-class Americans with relatively small tax cuts that will in many cases be more than offset by Trump's tariffs.

The Trump megabill will give the top 1 percent tax cuts totaling $1.02 trillion over the next decade. For comparison, the bill’s cuts to the Medicaid health care program will total $930 billion over the same period.

The predominant feature of the tax and spending bill working its way through Congress is a massive tax cut for the richest 1 percent — a $114 billion benefit to the wealthiest people in the country in 2026 alone.

The Senate tax bill under debate right now would bring very large tax cuts to very high-income people. In total, the richest 1 percent would receive $114 billion in tax cuts next year alone. That would amount to nearly $61,000 for each of these affluent households.

If you find yourself in a hole, stop digging. This is exactly what Louisiana Senators did when they rejected two tax-cut bills that would have created a billion-dollar shortfall in the coming fiscal years.

Compared to its House counterpart, the Senate bill makes certain tax provisions more generous, including corporate tax breaks that it makes permanent rather than temporary. But the bottom line for both is the same. Both bills give more tax cuts to the richest 1 percent than to the entire bottom 60 percent of Americans, and both bills particularly favor high-income people living in more conservative states.

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.

Given this environment, local leaders must do what they can to preserve and strengthen progressive revenue tools, advocate for expanded local taxing authorities and flexibility, and push their state leaders to decouple from harmful federal tax changes.