Powell Testimony 2018 by Federalreserve is licensed under Public Domain
In a new column published on Forbes.com on February 24, ATR’s Patrick Gleason looks at how the multi-year trend of states moving to lower and flatter income tax rates has continued apace in the first two months of 2023:
Legislators in eight blue states kicked off the year introducing a coordinated package of tax hikes targeting upper income households. While that effort attracted considerable media coverage, the more dominant theme in state capitals this year when it comes to tax policy is not widespread interest in soaking the rich, but rather a continuation of the multi-year trend of states moving to lower and flatter income tax rates, with some lawmakers and governors aiming for full income tax repeal.
California’s $22 billion annual budget deficit has generated headlines, but the Golden State is an outlier among states when it comes to public finances. “State and local governments are really flush these days,” Federal Reserve Chairman Jerome Powell said at a February 1 press conference, adding that because of this, “many of them are considering tax cuts or even sending checks.”
Fed Chair Powell is correct. In fact, a state that was a symbol for GOP dysfunction only weeks ago, Ohio, is now an example of how, even amid intra-party discord, Republicans of all stripes are still able to unify in the name of rate-reducing tax reform. By setting that as a top priority for the year, Ohio House Speaker Jason Stephens (R) and his leadership team have put forth an agenda that will do much to rectify disharmony and ease tensions in Buckeye State Republican ranks stemming from Stephens’ unexpected ascension to the speakership in January, something that was accomplished with Democratic votes.
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