Wisconsin

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.

2025 saw an intensification of state and local tax fights across the country, as well as growing experimentation with local-option taxes, levies, fees, and tourism taxes aimed at keeping budgets afloat while also navigating political constraints imposed by state legislatures.

With a little over a week left, some states are solidifying their spots on the tax policy “naughty or nice” list.

States are increasingly facing difficult choices as revenues stagnate and deficits come clearer into focus.

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.

Sales tax holidays are often marketed as relief for everyday families, but they do little to address the deeper inequities of regressive sales taxes. In 2025, 18 states offer these holidays at a collective cost of $1.3 billion.

If instead of giving $117 billion to the richest 1 percent, that money had been evenly divided among all Americans, we'd each get $343 - or nearly $1,400 for a family of four.

The last states are wrapping up legislative sessions, and some are crossing the finish line with major income tax cuts.