11 States Pose to Reduce Income Taxes by 2023

On Jan. 1, eleven states will lower their individual income tax rates.

Arizona, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Nebraska, New Hampshire, New York, and North Carolina will cut the individual income tax rate on New Year’s Day, according to the Tax Foundation. More than 20 states have reduced individual income tax rates in the last two years.

Three of these states – Arizona, Idaho, and Mississippi –will also move away from a graduated-rate income tax to a flat tax where all income is taxed at the same rate regardless of income level, the Tax Foundation reported.

According to the Tax Foundation, only one state is increasing its individual income taxes. That’s Massachusetts. The state will shift from a flat rate tax of 9% to a graduated-rate rate tax of 9% on household incomes over $1 million.

The Tax Foundation reports that Hawaii and Illinois expanded their tax credit program. This reduces the final dollar amount on the tax bill instead of reducing taxable income.

According to the United States Census, states with low or non-personal income tax rates are amongst the most rapidly growing. data Source: U.S. Census. The U.S. Census lists North Carolina, Idaho and Florida as the states included.

According to the Tax Foundation, Florida doesn’t have an income tax. Idaho and North Carolina, however, have flat income taxes.

According to the Tax Foundation: Nebraska, Alabama and Delaware enacted exemptions for a part to all of their retirement income or military pensions.

Gary Wolfram, Hillsdale College Professor and Economics, stated to The Center Square: States with lower income taxes tend to attract more businesses and economic activity.

“States with lower income taxes attract economic activity,” Wolfram stated. “The latest census data on state population growth is evidence of the fact. This results in job opportunities and increases in property values that particularly benefit the median income earners.”

Data from the U.S. Census show that states like New York, Hawaii and California have shrinking populations. These states also rank among the top ten states that have the highest income tax, with California at 13.3%.

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