Montana

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.

The progressivity of the federal tax code has been waning. State and local policymakers should respond by protecting their revenue bases, promoting equity, and safeguarding vulnerable communities from harmful budget cuts. 

Taxing the proceeds generated by wealth through a new Wealth Proceeds Tax is a simple way for states to raise billions in new revenue and improve the fairness of their tax systems.

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.

Nearly two-thirds of states now have an Earned Income Tax Credit (EITC). Momentum continues to build on these credits that boost low-paid workers’ incomes and offset some of the taxes they pay, helping lower-income families achieve greater economic security.

Despite an increasingly bleak state revenue outlook, state lawmakers across the country continue to prioritize regressive tax cuts.

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.

Refundable tax credits were a big part of state tax policy conversations this year. In 2025, nine states improved or created Child Tax Credits or Earned Income Tax Credits.

All eyes in statehouses in recent weeks have been on federal budget negotiations, and now that the “megabill” has passed, they are focused in on their own budgets in search of ways to cope with the enormous consequences coming their way. All states will see fewer federal dollars flowing through their coffers, higher needs due […]