Is it better to live in a state with no income tax? It’s a great question to ask, especially when considering how much of our paycheck is already set aside for Uncle Sam. Seven U.S. states forgo individual income taxes as of 2018: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Residents of New Hampshire and Tennessee are also spared from handing over an extra chunk of their paycheck, though they do pay tax on dividends and income from investments. The main benefit of eliminating the individual income tax, proponents say, is that states with no income tax on residents become beacons for growth. They’re better at creating jobs and keeping a core of young, educated workers from moving to other states. The American Legislative Exchange Council reports that over the past decade the nine states without a personal income tax have consistently outperformed the nine states with the highest taxes on personal income in job creation, population growth and even … [Read more...] about Is a state with no income tax — like Washington — better or worse?
Lowest income tax states
July 13, 2018 By Jason Taylor Republican Governor Mike Parson has signed one of the last remaining high-profile proposals passed by the legislature this year. Gov. Mike Parson-R He chose a business in the hometown of the bill’s sponsor, GOP Representative Elijah Haahr of Springfield, to pen an income tax cut. The measure was the only piece of legislation carried this year by Haahr, the Missouri House Speaker Pro Tem. With Parson’s signature, the individual income tax rate most Missourians pay will drop four-tenths of a percent. Combined with another tax cut triggered by increases in revenue collections, the rate will drop from the current 5.9% to 5.4% in January. A measure passed in 2014 shaves off the tax rate by one-tenth of a percent if revenues rise by $150 million over any of the three previous years. That scenario triggered such reductions in 2018 and 2019 and could further reduce the rate to 5.1% when fully implemented with three more cycles … [Read more...] about Missouri Gov. Parson signs income tax cut in Springfield
Minnesota Senate Republicans are proposing a reduction in Minnesota's lowest income tax rate, as part of a proposal they unveiled Tuesday they say is intended to prevent any tax increase on 99.8 percent of Minnesotans. The Senate GOP released its tax plan a day after the House passed its own tax cut plan on Monday. Senate Republicans want to use $176 million in money from the state's projected budgeted surplus to reduce the lowest-tier income tax rate from 5.35 percent to 5.1 percent beginning this year. "The current system is abusive and punishes hard work," said Sen. Roger Chamberlain, R-Lino Lakes, the Taxes Committee chairman. Unless the Legislature responds to the federal tax overhaul passed last year and signed by President Donald Trump, 300,000 Minnesotans could face tax increases, while the state tax code would be come a confusing maze for both taxpayers and the Department of Revenue. Lawmakers and DFL Gov. Mark Dayton have until the Legislature's May 21 adjournment deadline to … [Read more...] about Minnesota Senate Republicans propose income tax reduction
More than 2 million Minnesotans would get a state income tax cut under a proposal state House Republicans are pushing, while about 179,000 filers in the state would see their taxes go up. Republicans in the state House want to drop the state’s second-lowest income tax rate from 7.05 percent to 6.75 percent by tax year 2020. But, in its drive to simplify a tax code that was thrown into disarray by last year’s federal tax overhaul, the GOP proposal would kill some deductions at the state level that were eliminated at the federal level — like union dues, business expenses that are not reimbursed by your employer, moving expenses for work and others. In recent decades, any move to raise state taxes has provoked universal opposition from Republicans in the Legislature. But the need to conform Minnesota’s system to the new federal law has left GOP lawmakers needing to collaborate with DFL Gov. Mark Dayton in order to avoid even more widespread tax increases on … [Read more...] about House GOP wants income tax cut for 2.1 million Minnesotans, but smaller number would see hikes
House Republicans at the Minnesota Legislature released a plan Saturday to cut the second-lowest income tax bracket from 7.05 percent to 6.75 percent by tax year 2020, which if passed into law would be the first income tax rate reduction in Minnesota since 2000. The House GOP tax plan — which also includes a higher standard deduction for more tax-free income and an increase in the allowable property tax deduction — comes in response to the federal tax overhaul passed last year that will have a significant impact on Minnesotans unless the Legislature acts. Minnesotans' state taxes are linked to the federal system. Due to the federal tax overhaul, Minnesota has to update its tax code or tax filers would be forced to use the old federal rules to determine their state taxes, which would create a complex headache for both filing and administration. But simply adopting the new federal rules in full would take some key deductions away from Minnesotans on their state tax return, … [Read more...] about Minn. House Republicans release plan to cut state income tax rate