Saturday, January 4, 2025

These 9 States Are Cutting Income Taxes On Jan. 1. Here's Where Taxpayers Will Get A Break.

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Some Americans could get a break on their state income taxes this year, with nine states kicking off 2025 with a reduction in their individual income tax rates, according to an analysis from the Tax Foundation, a think tank that focuses on taxes.

The changes are part of a recent push to cut taxes at the state level that started during the pandemic when many states found themselves flush with tax revenue. But the left-leaning Institute on Taxation and Economic Policy (ITEP) has termed the trend an "anti-tax playbook" that could eventually crimp public services.

"The evidence of the past four years indicates that many states understand and value the importance of creating and maintaining a stable, pro-growth and competitive tax code," Tax Foundation analysts noted in a blog post on the 2025 changes.

Here are the states where income taxes will be cut starting on Jan. 1, 2025, based on the Tax Foundation's analysis.

That's a fairly small savings for middle-class residents, according to local news outlet IPB News, which estimates the reduction will result in a tax cut of $33 for a worker earning $65,000 a year.

The new flat tax rate was signed into law by Gov. Kim Reynolds in May, who, along with state lawmakers, have argued that the state was collecting too much money from its residents, the publication noted.

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