Kentucky

While record state revenue surpluses have led to big pushes in red states to make unnecessary permanent income and corporate tax cuts, Democrats are also getting in on the tax-cut mania...

Governors and legislators are beginning to settle on and advance tax bills that could drastically shape the future of their states and several trends and themes are beginning to emerge...

A common theme is emerging out of states, as governors around the U.S. begin the year with their annual state speeches, and the news does not bode well for long-term growth and sustainable budgets...

As expected, with the start of many new legislative sessions around the country, lawmakers have introduced a slew of tax cut plans following better-than-expected budget outlooks that have, so far, weathered the impact of the pandemic...

The same legislators who touted tax cuts for the rich as solution to our problems before the pandemic are also saying tax cuts for the rich are a solution during the pandemic. Tax cuts cannot be a solution to everything, especially at a time when the richest Americans are amassing more wealth than ever.

One of the few industries to excel during the economic downturn brought on by the pandemic has been the marijuana business, and lawmakers around the country are taking notice as they try to ensure that sales in their state are both legal and subject to tax...

Though we can’t fault anyone for being distracted by the major stories of the day, we at ITEP remain committed to keeping you up to date on what’s happening in the tax world around you...

Today is the last day of the fiscal year in many states, and some lawmakers might want to take the opportunity to make some new fiscal year resolutions. Legislators in Arizona, New Hampshire, Ohio, North Carolina, and Wisconsin, for example, should really cut back on the trickle-down tax-cut Kool-Aid, which may make parties with rich donors more fun but tends to be both harmful and habit-forming...

Two significant victories headlined state tax debates in the past week, as New Mexico leaders improved existing targeted tax credits to give bigger boosts and reach more families in need, and West Virginia lawmakers unanimously shut down a destructive effort to eliminate the state’s progressive income tax. These developments follow last week’s major wins for progressive taxation and targeted assistance in New York, and more good news is likely soon as Washington legislators continue to advance their own targeted credit for working families. Not all the news is positive though, as costly and/or regressive tax cuts remain on the table…

Supporters of tax fairness and adequate funding for public needs are hoping West Virginia’s income tax elimination effort turns out to be a prank, but most states are not fooling around with such harmful policies this year. For example...

Historic and current injustices, both in public policy and in broader society, have resulted in vast disparities in income and wealth across race and ethnicity. Employment discrimination has denied good job opportunities to people of color. An uneven system of public education funding advantages wealthier white people and produces unequal educational outcomes. Racist policies such as redlining and discrimination in lending practices have denied countless Black families the opportunity to become homeowners or business owners, creating extraordinary differences in intergenerational wealth. These inequities have long-lasting effects that compound over time.

It was a relatively quiet week in state fiscal policy, likely partly due to states waiting for federal guidance on some of the details in the American Rescue Plan. As they await those details, lawmakers in Mississippi and West Virginia continue to wrangle over whether to recklessly eliminate their income taxes, while leaders in states including Connecticut and New York considered more productive and progressive reforms. And in the meantime, groundbreaking work on the intersection of race and tax policy is now available.

We wrote last week that the inclusion of fiscal relief for states and localities in Congress’s American Rescue Plan should free up state lawmakers’ time and attention to focus on the comprehensive reforms needed to address upside-down and inadequate tax codes, and some states are already doing just that.

Although lawmakers in some states continue to push for expensive and regressive tax cuts that would primarily benefit wealthy households, worsen economic and racial injustices, and undermine funding for key public services, this week’s state fiscal news is dominated by efforts to do the opposite. Leaders in the District of Columbia, Maine, Nebraska, New York, Washington, and Wyoming made recent headlines by advocating for policies that improve on upside-down tax codes and generate needed funding for shared priorities like schools and health care.

Warming temperatures in many parts of the country this week seem to be thawing out state fiscal debates as well. Multiple states including California, Colorado, Maryland, and New Jersey saw movement on efforts to improve tax credits for low- and middle-income families. Mississippi House lawmakers suddenly rushed through a dangerous bill to eliminate the state’s income tax and shift those taxes onto lower-income households. Montana senators also approved regressive income tax cuts and South Dakota legislators advanced an anti-tax constitutional amendment, while lawmakers in Hawaii, Rhode Island, and Washington made progress on improving the progressivity of their tax codes. Gas…

Cold-hearted regressive tax proposals were pushed this week to cut income taxes on high-income households in states including Idaho, Montana, and West Virginia, while advocates for fair taxes and well-funded services continue to turn up the heat on taxing the richest residents in states like Connecticut and Pennsylvania.

This week, the governors of New Hampshire and West Virginia proposed to eliminate their states’ most progressive revenue sources and shift taxes even more heavily onto the middle- and low-income families who already pay the highest rates in both states. It was also a big week for proponents of legalizing recreational cannabis, as that movement made progress in Hawaii, Virginia, and Wisconsin.

As states kick off their 2021 legislative sessions, it’s clear that many governors and lawmakers are attempting to “take a mulligan” on the last year and recycle tax-slashing ideas that were already bad in 2020 and are even worse now as states try to recover from the Covid-19 pandemic and accompanying downturn...On a brighter note, Illinois leaders showed they did learn from the events of 2020, passing a major criminal justice reform bill and payday loan protections intended to reduce racial inequities.

Our last Rundown of 2020 includes news of yet another misguided proposal to eliminate a state income tax, this time in Arkansas. Florida and Missouri, on the other hand, are looking to modernize their tax codes by becoming the last two states to enforce their own sales taxes on online retailers. Leaders in Maryland and Oregon, meanwhile, are working to decouple the state from unnecessary and regressive tax cuts included in the federal CARES Act. And Missouri and Nevada lawmakers both got updated estimates of the revenue shortfalls they will need to resolve when they convene in 2021. The Rundown…

An ITEP report finds that taxes that people pay directly would stay the same or go down in 2022 for 98.1 percent of Americans under President-elect Joe Biden’s tax plan.

A state-by-state analysis of President-elect Joe Biden’s proposal to raise taxes for filers with income of more than $400,000 finds that in 2022, just 1.9 percent of all taxpayers would face a direct tax increase. This would vary only slightly by state. For example, in West Virginia, 0.6 percent of taxpayers would see an increase, and in Connecticut, 3.7 percent of taxpayers’ taxes would increase.

The federal tax system and every state treat income from capital gains more favorably than income from work. Preferential capital gains tax treatment includes exclusions and seldom-discussed provisions like deferral and stepped-up basis, as well as more direct tax subsidies for profits realized from local investments and, in some instances, from investments around the world. This policy brief explains state capital gains taxation, examines the flaws in state capital gains tax breaks, and proposes reform options that will help make state tax systems more progressive and more equitable.