Governments at every level grapple with affordability challenges. States can financially empower women and families by cutting income taxes. Many states have recently recognized the need to lower or eliminate income taxes:
- Nine states levy no personal income tax, and instead rely on other revenue sources that do not discourage growth.
- Since 2015, 22 states have lowered their income tax while only nine have raised it.
- Several states—including Kentucky, Mississippi, and Oklahoma—are incrementally reducing their state income tax with triggers until the tax reaches zero.
- Income tax collections account for 37% of state tax collections in fiscal year 2022, and reliance on income tax varies widely by state.
Allowing residents to keep more of their income can create an environment that is competitive and attractive for migration and investment. Eliminating income taxes spurs entrepreneurship, while raising income taxes discourages work, business creation, saving, and investing.
Here’s the issue of state income tax elimination in 60 seconds: