Several countries are reduce taxes this year, putting more money in the pockets of other Americans as they struggle with the financial crisis caused by inflation.
At least 11 states, many led by Republicans, have cut taxes for residents in some way this year, according to the nonpartisan Tax Foundation, a group that advocates for lower taxes.
“We’re seeing the end of two years of tax cuts across the country, driven by rising costs and the desire for states to remain competitive in the racing environment,” said Jared Walczak, vice president of public services. Tax Foundation.
Here’s a closer look at where state taxes are being cut.
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Arizona has adopted a flat tax plan that eliminates its previous income tax rate, which started at 2.59% and topped out at 4.5% on income over $159,000 a year for individuals. All taxpayers in the state will now pay a flat rate of 2.5%.
“This tax cut keeps Arizona competitive and maintains our reputation as a job magnet and generator of opportunity,” former Arizona Gov. Doug Ducey, a Republican, said in September.
In total, the plan will save taxpayers about $1.9 billion next year, although critics say the plan benefits more wealthy Arizonans.
Arkansas’ top personal income tax was cut to 4.9% from 5.9%.
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The change, which runs through 2022, helps reduce rates that were supposed to begin in the 2025 tax year.
Idaho adopted a flat tax rate of 5.8% that will take effect this year.
This compares to a previous increase of 6%.
The state personal income tax rate has been reduced to 3.15% from 3.25%, effective in 2023 and 2024. There are other triggers that can reduce the rate to 2.9% if certain conditions are met.
Iowa will begin adopting a 3.9% tax this year, though the change is effective for four years, so some people will see the benefits sooner than others.
The $1.9 billion tax cut — signed into law last year by Republican Gov. Kim Reynolds — also eliminates taxes on retirement savings and lowers corporate taxes.
“With this bill, Iowa now has the fourth highest per capita tax rate in the nation,” Reynolds said in a statement. “There has never been a better time in Iowa for bold, sustainable tax reform.”
Kansans looking to save money on food this year have an opportunity: The state has implemented the first phase of a plan to eliminate food taxes. Starting from Jan. 1, the state food tax was reduced to 4% instead of 6.5%.
Taxes will continue to decline until they reach zero in 2025.
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Starting in January, Kentucky lowered its personal income tax and increased its sales tax. Personal income tax fell to 4.5% from 5%, but sales tax will now be applied to a number of new services including car rentals, ride-sharing and taxis. On top of this, a 6% tax will be applied instead of the normal tax.
Gov. Republican Mike Parson signed into law last year a $760 million tax cut, which he called “the largest tax cut in state history.”
Under the new tax law, Missouri’s top income tax rate dropped to 4.95% in January from the previous rate of 5.3%. (Tax rates are already set to drop to 5.2% this year).
On top of that, the first $1,000 is now tax-free.
Mississippi is transitioning to a tax system, effective in January. The 4% tax on taxable income between $5,000 and $10,000 has been eliminated; instead it is a single rate of 5% on income over $10,000.
Taxes will drop to 4.7% in 2024, 4.4% in 2025 and 4% in 2026.
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New York increased its tax cuts for middle-class families, with rate cuts planned for 2025 taking effect this year.
The tax rate on assets between $13,900 and $80,650 for single filers will drop to 5.5%. For filers earning between $80,650 and $215,400, the tax rate drops to 6%>
This represents a decrease from the 2022 tax year when the successive rates for the income groups were at 5.85% and 6.25%.
North Carolina’s flat tax is dropping to 4.75% in 2023, down from the previous rate of 4.99%.