Black Ink Brings Red-State Tax Cuts

The state tax-cutting momentum that began unexpectedly during the pandemic has accelerated as 2023 dawns. This year, residents of 11 mostly Republican-leaning states are set to enjoy cuts to their individual income taxes, according to the Tax Foundation.

That’s on top of an equal number of states that trimmed their income-tax rates in 2022. A handful of states have also sliced business taxes and reduced or suspended levies on gasoline and groceries, amid rising inflation.

Behind these reductions lie the faster-than-average recovery of tax collections from lockdowns and the flush budgets enhanced by $500 billion in stimulus funds that the Biden administration sent to states, cities, and school districts via the American Rescue Plan Act.