{"id":1491185,"date":"2024-02-09T12:30:00","date_gmt":"2024-02-09T12:30:00","guid":{"rendered":"https:\/\/publicintegrity.org\/?p=127404"},"modified":"2024-02-09T12:30:00","modified_gmt":"2024-02-09T12:30:00","slug":"more-tax-cuts-put-states-revenue-at-risk","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2024\/02\/09\/more-tax-cuts-put-states-revenue-at-risk\/","title":{"rendered":"More tax cuts put states\u2019 revenue at risk"},"content":{"rendered":"<figure><img width=\"1024\" height=\"797\" src=\"https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?fit=1024%2C797&amp;ssl=1\" class=\"attachment-rss-image-size size-rss-image-size wp-post-image\" alt=\"Cracked piggy bank with band aid\" decoding=\"async\" srcset=\"https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?w=2560&amp;ssl=1 2560w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=300%2C234&amp;ssl=1 300w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=1024%2C797&amp;ssl=1 1024w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=768%2C598&amp;ssl=1 768w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=1536%2C1196&amp;ssl=1 1536w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=2048%2C1594&amp;ssl=1 2048w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=1200%2C934&amp;ssl=1 1200w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=1568%2C1221&amp;ssl=1 1568w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=400%2C311&amp;ssl=1 400w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=706%2C550&amp;ssl=1 706w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?resize=150%2C117&amp;ssl=1 150w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?w=2340&amp;ssl=1 2340w, https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?fit=1024%2C797&amp;ssl=1&amp;w=370 370w\" sizes=\"(max-width: 34.9rem) calc(100vw - 2rem), (max-width: 53rem) calc(8 * (100vw \/ 12)), (min-width: 53rem) calc(6 * (100vw \/ 12)), 100vw\" \/><\/figure><span class=\"rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\">5<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>\n<p>At least a dozen proposals for <span class='tooltipsall tooltipsincontent classtoolTips17'>income tax<\/span> cuts that would primarily benefit wealthy residents and big companies are already on the table for state legislatures to consider in 2024 \u2014 and more are likely to come.&nbsp;<\/p>\n\n\n\n<p>This follows on the heels of 26 states cutting their personal income tax rates, corporate income tax rates or both between 2021 and 2023, according to the Center on Budget and Policy Priorities, a think tank that focuses on policies\u2019 effect on lower-income people.&nbsp;<\/p>\n\n\n\n<p>Thirteen of those states cut those taxes multiple times.<\/p>\n\n\n\n<div class=\"wp-block-group newspack-pattern subscribe__style-6 is-style-border compress-newsletter has-dark-gray-color has-text-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"background:linear-gradient(180deg,rgb(238,242,244) 0%,rgb(166,207,248) 100%)\"><div class=\"wp-block-group__inner-container\">\n<p class=\"has-text-align-center has-dark-gray-color has-text-color has-large-font-size\"><strong>Never miss an investigation<\/strong><\/p>\n\n\n\n<p class=\"has-text-align-center has-dark-gray-color has-text-color\">Subscribe to our free, weekly Watchdog newsletter to get the latest inequality news from Public Integrity.  <\/p>\n\n\n\n<div class=\"wp-block-columns are-vertically-aligned-center is-layout-flex wp-container-core-columns-layout-1 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\t<div\n\t\tclass=\"newspack-newsletters-subscribe \"\n\t\tdata-success-message=\"Thank you for signing up!\"\n\t\t\t>\n\t\t\t\t\t<form id=\"newspack-subscribe-1\">\n\t\t\t\t<input type=\"hidden\" id=\"newspack_newsletters_subscribe\" name=\"newspack_newsletters_subscribe\" value=\"3566baa76c\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/feed\/\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t<input type=\"hidden\" name=\"lists[]\" value=\"ffd1d0160d\" \/>\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"newspack-newsletters-email-input\">\n\t\t\t\t\t\t\t\t\t\t\t<label for=\"newspack-newsletters-subscribe-block-input-82984-email\">Email Address<\/label>\n\t\t\t\t\t\t\t\t\t\t<input\n\t\t\t\t\t\tid=\"newspack-newsletters-subscribe-block-input-82984-email\"\n\t\t\t\t\t\ttype=\"email\"\n\t\t\t\t\t\tname=\"npe\"\n\t\t\t\t\t\tautocomplete=\"email\"\n\t\t\t\t\t\tplaceholder=\"Email Address\"\n\t\t\t\t\t\tvalue=\"\"\n\t\t\t\t\t\/>\n\t\t\t\t\t\t<input class=\"nphp\" tabindex=\"-1\" aria-hidden=\"true\" name=\"email\" type=\"email\" autocomplete=\"off\" placeholder=\"Email Address\" \/>\n\t\t\t\t\t\t\n\t\t\t\t\t<input class=\"submit-button\"type=\"submit\" value=\"Subscribe\" style=\"\" \/>\n\t\t\t\t<\/div>\n\t\t\t<\/form>\n\t\t\t\t<div class=\"newspack-newsletters-subscribe__response\">\n\t\t\t<div class=\"newspack-newsletters-subscribe__icon\"><\/div>\n\t\t\t<div class=\"newspack-newsletters-subscribe__message\">\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n\t\n\n\n<p class=\"has-text-align-center has-dark-gray-color has-text-color has-small-font-size\" style=\"padding-top:var(--wp--preset--spacing--40)\">Use the unsubscribe link in the emails to opt out at any time.<\/p>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n<p>Like the proposals, the tax cuts already in place disproportionately benefit wealthy households and large corporations. The lost revenue in 2022 and 2023: $13 billion, the Center on Budget and Policy Priorities estimated. The group says the total loss will balloon to roughly $124 billion by 2028, which doesn&#8217;t include the impact of any new tax-cutting proposals.<\/p>\n\n\n\n<p>\u201cWhat we know is that tax cutting always requires trade-offs,\u201d said Aidan Davis, state policy director at the Institute on Taxation and Economic Policy, which calculates the impact of tax policy on different income groups. \u201cIf you choose to collect less in taxes, then you&#8217;re choosing to do less of something else. It might be smaller investments in our schools. It might be less frequent road maintenance. It might be a weaker safety net for those facing hard times.\u201d<\/p>\n\n\n\n<p>A Center for Public Integrity investigation found last year that conservative groups funded by rich political donors <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/state-tax-systems-contribute-to-inequality-these-states-are-doubling-down\/\">pushed these tax cuts in most states<\/a>, and that temporary federal pandemic aid gave legislators cover to argue that there was plenty of revenue.<\/p>\n\n\n\n<p>In Oklahoma, Republican Gov. Kevin Stitt <a href=\"https:\/\/www.sos.ok.gov\/documents\/executive\/2094.pdf\">proposed<\/a> an across-the-board cut of 0.25% to the state\u2019s personal income tax. Annual savings would amount to $19 for the lowest-income earners and $2,634 for the highest, according to an <a href=\"https:\/\/okpolicy.org\/fact-check-the-impact-of-a-25-percent-income-tax-cut-to-oklahoma-taxpayers\/\">analysis by the Institute on Taxation and Economic Policy.<\/a><\/p>\n\n\n\n<p>\u201cWhen we use tax cuts to say \u2018we are putting money in people\u2019s pockets,\u2019 yes we are, but it\u2019s usually the wealthy,\u201d said Shiloh Kantz, executive director of the Oklahoma Policy Institute, which advocates for equitable policies.<\/p>\n\n\n\n<p>In a special session called for the tax cuts last week, Oklahoma\u2019s House passed the bill. The Senate convened and voted to adjourn without further action the same day. Senate Pro Tem Greg Treat, a Republican, said in a press conference that he\u2019s concerned <a href=\"https:\/\/oksenate.gov\/press-releases\/pro-tem-greg-treat-press-conference-12924?back=\/press-releases\">about how to pay for those cuts<\/a> and considers the special session \u201ca waste of taxpayer dollars.\u201d&nbsp;<\/p>\n\n\n\n<p>When adjusted for inflation and population growth, <a href=\"https:\/\/i0.wp.com\/okpolicy.org\/wp-content\/uploads\/FY24-Budget-Highlights_Figure-1.png?ssl=1\">the current state budget is 12% smaller<\/a> than it was two decades ago, according to the Oklahoma Policy Center.<br><\/p>\n\n\n\n<p>But several bills for further tax cuts remain on the table for consideration in the state\u2019s regular session, which started Monday. The governor <a href=\"https:\/\/oklahoma.gov\/governor\/newsroom\/newsroom\/2023\/september2023\/governor-stitt-calls-for-special-session-on-tax-fairness--tax-cu.html\">has indicated<\/a> he wants the state to move toward eliminating the income tax entirely. \u201cThis will keep us in line with surrounding Republican-led states,\u201d the governor\u2019s office said in a press release.&nbsp;<\/p>\n\n\n\n<p>\u201cOklahoma ranks among the worst states in nearly every quality-of-life report from health, poverty, child hunger, education, a list of needs that we do not have enough time for on this call,\u201d said Kantz, with the Oklahoma Policy Institute. \u201cDecades of tax cuts have kept the state from investing billions of dollars annually into the shared services that could help improve these outcomes.\u201d<br><\/p>\n\n\n\n<p>State lawmakers have cut the state\u2019s <a href=\"https:\/\/okpolicy.org\/individual-income-tax\/\">personal income tax<\/a> <a href=\"https:\/\/okpolicy.org\/resources\/online-budget-guide\/revenues\/an-overview-of-our-tax-system\/oklahomas-major-taxes\/individual-income-tax\/\">nine times<\/a> in the last 20 years, bringing it down from 7% in 2002 to 4.75% today, according to the Oklahoma Policy Institute. This includes a tax cut in 2021.<\/p>\n\n\n\n<p>A <a href=\"https:\/\/www.cbpp.org\/research\/state-budget-and-tax\/states-recent-tax-cut-spree-creates-big-risks-for-families-and\">recent report<\/a> from the Center on Budget and Policy Priorities lays out the damage that can be expected from recent tax cuts around the country.<\/p>\n\n\n\n<p>In Arizona, North Carolina and West Virginia, the cuts could shrink general funds by about 11% over the next five years, according to the <a href=\"https:\/\/www.cbpp.org\/research\/state-budget-and-tax\/states-recent-tax-cut-spree-creates-big-risks-for-families-and\">Center on Budget and Policy Priorities report<\/a>. Cuts could also reduce general fund revenues by at least 6% over that period in Arkansas, Idaho, Iowa, Kentucky, Nebraska and North Dakota.&nbsp;<\/p>\n\n\n\n<p>Republican legislative leaders in Kansas have pushed for income tax cuts in this recent wave as well. Both last year and already this year, Democratic Gov. Laura Kelly has <a href=\"https:\/\/kansasreflector.com\/briefs\/kansas-governor-vetoes-reckless-flat-tax-proposal\/\">vetoed<\/a> those bills, calling them \u201creckless\u201d and \u201cirresponsible\u201d in January, the Kansas Reflector reported.<\/p>\n\n\n\n<p>Kansas is a frequently-cited example of why income tax cuts can be harmful. After reducing rates in 2012 and 2013, the state lost hundreds of millions of dollars in revenue, slashed public spending, <a href=\"https:\/\/www.governing.com\/archive\/sp-drops-kansas-credit-rating.html\">hurt its credit rating<\/a> and eventually <a href=\"https:\/\/www.npr.org\/2017\/06\/07\/531886684\/the-kansas-tax-cut-experiment-comes-to-an-end-as-lawmakers-vote-to-raise-taxes\">repealed the tax cuts<\/a>.&nbsp;<\/p>\n\n\n\n<p>Backtracking after cuts isn\u2019t always possible. It\u2019s often far more difficult to increase tax rates or find new sources of revenue because many states require a supermajority legislative vote to enact new taxes, in comparison with a majority vote to reduce them.<\/p>\n\n\n\n\n\n<p>Oklahoma has the nation\u2019s highest threshold for raising new revenue, requiring <a href=\"https:\/\/okpolicy.org\/sq-640-made-oklahoma-ungovernable\/\">more than 75% of its legislature<\/a> to approve new taxes. As a result, Oklahoma lawmakers have voted to raise new revenue only once since 1992, according to the Oklahoma Policy Center.<\/p>\n\n\n\n<p>\u201cWhat oftentimes happens in the shorter term in many states is revenue begins to decline due to sharp cuts in income taxes,\u201d said Wesley Tharpe, senior advisor on state tax policies for the Center on Budget and Policy Priorities and author of its tax report. \u201cLawmakers will begin to turn to more <span class='tooltipsall tooltipsincontent classtoolTips18'>regressive<\/span> forms of revenue that fall on lower income individuals \u2014 increasing sales taxes or excise taxes on gas or tobacco or increasing fines and fees.\u201d<\/p>\n\n\n\n<p>The reliance on taxes like sales and excise taxes is why most states make poor residents <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/taxes-inequality-worse-progressive-tax\/\">contribute a greater share of their income<\/a> to taxes than wealthy people do, Public Integrity reported in a 2022 investigation.<br><\/p>\n\n\n\n<p>Arkansas enacted four rounds of personal and corporate income tax cuts in 2021, 2022 and 2023. For the annual cost of just the 2023 cuts, the state could have created an eight-week paid parental leave program for all parents in the state, according to Tharpe\u2019s report.&nbsp;<\/p>\n\n\n\n<p>Nebraska enacted three rounds of income tax cuts over the past three years, which will cost an estimated $1 billion annually by 2028. This revenue loss equals roughly what Nebraska spends on its Medicaid program that serves nearly 400,000 low-income residents.&nbsp;<\/p>\n\n\n\n<p>\u201cWhat is really important is the choice that is being made to forgo the investment that could be made with those dollars,\u201d Tharpe said. \u201cVoters don\u2019t often know what they\u2019re missing out on. Had they not cut the taxes, they could\u2019ve put more teachers in the classroom, childcare. It\u2019s really about the tradeoff.\u201d<\/p>\n\n\n\n<p>The tax cuts also largely help the wealthiest individuals, who are disproportionately white.<\/p>\n\n\n\n<p>In Arizona, for example, households of color account for more than 33% of taxpayers, but they would receive only 21% of the benefits from the tax plan enacted in 2021, the Arizona Center for Economic Progress estimated in an <a href=\"https:\/\/azeconcenter.org\/flat-tax-exacerbates-inequalities-for-households-of-color\/\">analysis<\/a> that year.&nbsp;<\/p>\n\n\n\n<p>\u201cThe true damage doesn\u2019t show up until a few years out,\u201d Tharpe said. \u201cYou can mask the harm with one-time funds, but eventually the bill comes due.\u201d&nbsp;<\/p>\n\n\n\n<p>A few <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/the-long-struggle-over-taxing-the-rich\/\">states have gone the other direction the last few years<\/a>, a path that Tharpe hopes more will follow.&nbsp;<\/p>\n\n\n\n<p>Massachusetts voters in 2022 amended their constitution to tax millionaires at a higher rate. &nbsp;The measure is expected to eventually raise at least $2 billion annually, with new revenue dedicated to public education and transportation. In 2021, Washington established a tax on capital gains that the state\u2019s Supreme Court upheld in 2023. The tax is expected to generate over $500 million a year that will go toward public schools and childcare.<\/p>\n\n\n\n<p>\u201cWhat we\u2019ve been programmed to believe is \u2026 \u2018taxes\u2019 equals \u2018bad,\u2019\u201d said Kantz of the Oklahoma Policy Center. \u201cWhen really we should talk about taxes as state revenue or government revenue or country revenue. It\u2019s the mutual agreement of all of us to come together and put a collective investment into an opportunity for everybody, not just ourselves.\u201d<\/p>\n<script type=\"text\/javascript\"> toolTips('.classtoolTips14','<span style=\"font-weight: 400;\">A tax or tax system where wealthier people pay a greater percentage of their income than poorer people. The federal system is <span class='tooltipsall tooltipsincontent classtoolTips14'>progressive<\/span>. The opposite of a progressive tax is a regressive one. <\/span>'); <\/script><script type=\"text\/javascript\"> toolTips('.classtoolTips17','<span style=\"font-weight: 400;\">A tax on income. Most often in the United States, income taxes are graduated, meaning the tax system consists of multiple brackets with rates rising up the income scale.<\/span>'); <\/script><script type=\"text\/javascript\"> toolTips('.classtoolTips18','<span style=\"font-weight: 400;\">A tax or tax system where poor people pay a greater percentage of their income than wealthier people. Examples include most property and sales taxes. The opposite of a regressive tax is a progressive one.<\/span>'); <\/script><script type=\"text\/javascript\"> toolTips('.classtoolTips20','A type of consumption tax added to the purchase of goods and services for consumers and businesses.'); <\/script><script type=\"text\/javascript\"> toolTips('.classtoolTips21','<span style=\"font-weight: 400;\">The percentage at which an individual or business is taxed. This could be a rate on income or on something else, such as the cost of a purchase.<\/span>'); <\/script><p>The post <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/more-tax-cuts-put-states-revenue-at-risk\/\">More tax cuts put states\u2019 revenue at risk<\/a> appeared first on <a href=\"https:\/\/publicintegrity.org\/\">Center for Public Integrity<\/a>.<\/p>\n\n<p class=\"syndicated-attribution\">This post was originally published on <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/more-tax-cuts-put-states-revenue-at-risk\/\">Center for Public Integrity<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"<figure><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"797\" src=\"https:\/\/i0.wp.com\/publicintegrity.org\/wp-content\/uploads\/2024\/02\/GettyImages-1498684699-scaled.jpg?fit=1024%2C797&amp;ssl=1\" class=\"attachment-rss-image-size size-rss-image-size wp-post-image\" alt=\"Cracked piggy bank with band aid\"><\/figure>\n<p>At least a dozen proposals for income tax cuts that would primarily benefit wealthy residents and big companies are already on the table for state legislatures to consider in 2024 \u2014 and more are likely to come.\u00a0 This follows on the heels of 26 states cutting their personal income tax rates, corporate income tax rates [\u2026]<\/p>\n<p>The post <a href=\"https:\/\/publicintegrity.org\/inequality-poverty-opportunity\/taxes\/unequal-burden\/more-tax-cuts-put-states-revenue-at-risk\/\">More tax cuts put states\u2019 revenue at risk<\/a> appeared first on <a href=\"https:\/\/publicintegrity.org\/\">Center for Public Integrity<\/a>.<\/p>\n","protected":false},"author":14971,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52578,3500],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1491185"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/14971"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=1491185"}],"version-history":[{"count":48,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1491185\/revisions"}],"predecessor-version":[{"id":1558929,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1491185\/revisions\/1558929"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=1491185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=1491185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=1491185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}