Taxpayers in a dozen states rang in the new year with more enthusiasm than usual. Thanks to the work of the wise in the state houses, residents of Arizona, Florida, Indiana, Kansas, Maryland, Michigan, Minnesota, Nebraska, New York, Ohio, Rhode Island and Wisconsin will get lower tax bills in 2015. There’s a message here for the new Congress.
Further good news is coming next year. State legislators in Missouri and Oklahoma trimmed certain taxes that will take place in 2016 and 2017. The American Legislative Exchange Council calculates that no state made more significant tax cuts than Wisconsin, where an average working-class family will pay about $680 less in taxes in 2015 than it paid last year. Gov. Scott Walker, a Republican, continues to be the tax slasher in a state where cutting taxes was long thought to be unfashionable. He has presided over tax cuts now worth $800 million, including the largest property tax cut in Wisconsin history and a reduction of the state’s income tax.
Nebraska lowered income, property and state sales taxes by more than $410 million in 2014, effective over the next five years. Ohio taxpayers will benefit from a 10 percent across-the-board reduction in income tax rates.
According to the American Legislative Exchange Council, Indiana encouraged the creation of jobs by lowering business property tax and the corporate business tax rates, worth $185 million. Michigan reduced its business property tax and Rhode Island cut its corporate income tax rate from 9 percent to 7 percent. Florida, one of the tax-friendliest states, reduced driver’s license renewal fees by $25. Two other tax-friendly states, Arizona and Kansas, made further cuts. Kansas reduced state mortgage registration fees, considerably reducing costs for homebuyers. Arizona trimmed its tax code in small but effective ways.
New York, Minnesota and Maryland have the third-, fifth- and seventh-highest state tax burdens in the nation, according to the Tax Foundation, and all cut their state tax rates. Maryland increased its death tax exemption to get closer to the federal rate. Business owners in Minnesota will pay a slightly lower corporate tax rate this year with three separate cuts.
Even New York, where residents have been fleeing to other states in large and discouraging numbers, and businesses find it ever more difficult to survive in the brutal business climate, took a tip from Maryland and Minnesota to lower the corporate tax rate and increase the state’s death tax exemption.
Tax cuts in these states will not only make life easier for the taxpayers, lowering their burdens in the struggle to survive and prosper, but the states will see stronger economies, with more employed workers to pay more taxes. Legislators, for their part, can go back to their constituents confident of a pat on the back instead of a boot in the seat of their pants. Everybody wins.