Meanwhile, policymakers everywhere can view the latest round of fiscal recklessness as a cautionary tale, and instead move in a different, better direction to raise the kind of bold, sustainable revenues states need to fund a brighter future for us all.1) First, every scrap of your Federal income, Deductions & Credits must be filled in, and the entire Federal tax file error checked and correct.Ģ) then run thru your entire NE Q&A until done in there.ģ) Only then, you must print out your (OK.save to PDF) your NE tax return.
Ideally they’d reverse cuts wherever possible, but at minimum they should choose not to dig the hole even further. Over the coming years, states that have slashed taxes can take several concrete steps to minimize the coming damage to their revenue systems. Take Minnesota and Washington, where state leaders rejected the call for tax cuts altogether, instead raising and protecting revenues to reinforce current public investments and fund new ones, too, such as universal school meals in Minnesota and upgrading aging school buildings in Washington. Looking ahead, policymakers nationwide should consider the harm this recent round of cuts will cause, and instead follow the example of states where policymakers prioritized revenues and the vital public services they support. Even though state lawmakers chose to reduce personal income tax rates and thereby weaken revenues, they did so in a relatively modest and targeted way that will mostly benefit low- and middle-income taxpayers, rather than people at the very top. The state legislature upheld her veto by a single vote.Īnother emerging bright spot is Connecticut. Laura Kelly chose to veto the measure, citing its “reckless” financial costs and outsized benefit to wealthy taxpayers. One bright spot this year? Kansas, where a massive tax cut fell narrowly short after Gov. Overall, the cuts will also provide a windfall to wealthy people and corporations, further weakening our democracy by tilting the scales of power even more toward those who already have it. That will mean real harm to state revenues, services, and economies now and down the road, as a forthcoming CBPP report will detail. Together, the recent tax-cutting spree will cost states tens of billions of dollars in lost revenue over the next several years. Applied at the same rate on all taxable income, flat taxes may sound fair at first, but in effect they only tilt state taxes further in favor of the wealthy, once sales taxes and other, more regressive revenue sources are accounted for. In five of those states, policymakers also structured the cuts to take effect as a so-called “flat tax,” making them especially regressive. Combined, 26 states have now reduced income tax rates in 2021, 2022, or 2023, and several states have done so multiple times.
This year’s cuts build on a host of similar policies approved over the past two years.
If full elimination were in effect today, West Virginia would face a $2.2 billion budget hole, or about what it spends now on all public education. Meanwhile, the plan could eventually eliminate that state’s personal income tax entirely, if certain triggers designed to further undermine the income tax are hit. Jim Justice signed a massive personal income tax cut that will cost more than $800 million each year starting in 2025 - or nearly twice what it might cost to eliminate child poverty in that state. About 80 percent of the benefits from this year’s personal income tax cut will go to that state’s richest 20 percent, while 80 percent of the corporate tax cut will likely leave the state entirely. Sarah Huckabee Sanders to slash personal and corporate income tax rates, worsening a decade’s worth of cuts that already costs that state about $1 billion each year.