Contact: Jon Whiten (ITEP) [email protected]
A new analysis from the Institute on Taxation and Economic Policy (ITEP) reveals that five states—Kansas, Mississippi, Missouri, Ohio, and Oklahoma—enacted the most significant income tax cuts for millionaires in 2025, collectively reducing state revenues by more than $800 million in 2026 and an estimated $2.2 billion a year once the cuts are fully implemented.
Just 12 percent of Americans believe wealthy families are overtaxed, yet state lawmakers are advancing tax policies that overwhelmingly benefit the richest residents. Meanwhile, at the federal level the new Trump tax law is projected to deliver $1 trillion in tax cuts to the top 1 percent over the next decade. Many state lawmakers have chosen to compound those benefits by cutting state income taxes to disproportionately benefit their wealthiest residents.
“These tax cuts are not only fiscally reckless but also deeply inequitable,” said Aidan Davis, ITEP’s State Policy Director. “At a time when state budgets are under immense pressure, it’s indefensible to hand millionaires five- and six-figure annual tax cuts while too many families struggle with affording the basics.”
Key Findings
- The five states enacting the largest millionaire tax cuts in 2025 were Kansas, Mississippi, Missouri, Ohio, and Oklahoma.
- Combined, their tax cuts will cost $2.2 billion a year once fully phased in.
- The average millionaire in these states will receive between $19,000 and $141,000 in annual cuts—more than 50 times the average tax reduction for non-millionaires.
- In Missouri, where lawmakers fully exempted capital gains income, millionaires’ cuts are than those for everyone else.
- Mississippi and Oklahoma approved plans to eliminate their state income taxes entirely, over time, handing millionaires average annual cuts of $141,000 and $133,000, respectively.
- Missouri became the first state to fully eliminate taxes on capital gains, reducing revenues by more than $600 million per year.
- Kansas and Ohio adopted flat tax systems that lower rates for the highest earners, costing each state about $1 billion annually once fully implemented.
“These policies double down on inequality,” said Dylan Grundman O’Neill, ITEP Senior Analyst. “They prioritize millionaires while putting critical services like education, health care, and infrastructure at risk for everyone else.”
About ITEP
The Institute on Taxation and Economic Policy (ITEP) is a nonpartisan think tank that conducts research on federal, state, and local tax policies, emphasizing equity, sustainability, and fiscal responsibility.
