Blue states joining Red in axing taxes
SALT LAKE CITY — A panel of Utah lawmakers gave approval Wednesday to a bill that would drop Utah’s income tax rate from 4.95% to 4.85%, costing about $160 million a year. The bill now moves to the floor of the state Senate for discussion, according to Deseret News. When people think of tax cuts, they often think of Red States doing the cutting. But Jared Walczak, vice president of state projects at The Tax Foundation, points out that many Blue State politicians are aiming for tax cuts, too.
Blue states off temporary tax cut
Taxpayers in Colorado and Oregon, both blue states, are scheduled to receive a temporary income tax cut in 2022, as reported by Forbes.
Ordinarily, Walczak said, Republicans lawmakers move to cut income taxes while Democrats look to trim sale taxes.
“In Colorado, Nebraska and New York, Democratic lawmakers and governors are talking seriously about income tax relief,” he said.
Corporate income tax shrinking
Boyd pointed out that with the pandemic-relief money flowing out of the nation’s capital, many states were flush with cash.
“Are some of these states setting themselves up with this one-time money that they’ve received? Are they going to be able to sustain things once that dries up and goes away?” he asked.
“States have been able to cut — not because of a big one-year or two-year revenue bump — but because they see a very strong trajectory,” Walczak said.
How are states leveraging corporate taxes to lure businesses to set up shop in their states? Boyd asked.
“The corporate income tax is a shrinking portion of the state revenue. It’s been below 5% of state tax collections in most states for a long time,” Walczak said, adding the Democratic governor of North Carolina signed a bill last year that would phase out the corporate tax over the next few years.
“We know taxes are one of those uniting things for citizens — maybe it’s a shared misery index — but what do you project, what are you seeing in the months ahead?” Boyd asked.
“I think this is gonna be a massive year for tax reform and tax relief,” Walczak said. “Last year was huge. This year has the potential to be even bigger, and a lot of this is very good.”
Inside Sources with Boyd Matheson can be heard weekdays from 1 p.m. to 3 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app.
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