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Several States, Including New York, Calling for Tax Cuts This Year

By:
Ruth Singleton
Published Date:
Mar 7, 2022

Gov. Hochul State of the State 2
New York Gov. Kathy Hochul

At least 13 states, led by both Democrats and Republicans are calling for tax cuts this year, the Wall Street Journal reported. This data comes from the Tax Foundation, a Washington group that usually advocates for simpler taxes with lower rates.

Kathy Hochul has proposed more than $2 billion in tax cuts, including a property tax rebate. According to Bloomberg, Gov. Hochul proposed a $2.2 billion middle-class property tax rebate for 2.5 million homeowners when she unveiled her budget in January. In addition she proposed a $1.2 billion tax cut for middle-class taxpayers, as well as tax relief for small businesses.  

Other states that are calling for tax cuts include Mississippi, where the state Senate voted reduce its grocery and state income taxes; Tennessee, whose governor has proposed reducing the state’s sales tax; and Kentucky, Georgia and Wisconsin, which are considering giving tax rebates or credits. 

The Journal observed that many states have ample treasuries as a result of the pandemic relief money that they received from the federal government. According to the National Association of State Budget Officers, revenue for all 50 states collectively grew by 14.5 percent in fiscal year 2021, Tax revenue is projected to continue growing at the state level for the coming fiscal year. 

The Journal quoted Jared Walczak, vice president of state projects at the Tax Foundation, who said, “Republican legislators have been more likely to focus on income tax cuts, while Democratic lawmakers have more frequently favored sales tax cuts, but what’s far more notable than the choice of tax cut is the broad bipartisan agreement that tax cuts are appropriate or even necessary.” 

In Connecticut Gov. Ned Lamont, a Democrat, has proposed $336 million in tax relief for property tax credits and other measures. Illinois Gov. J.B. Pritzker, another Democrat, announced that he wants to cut taxes by about $1 billion for using property-tax rebates and a suspension of the grocery tax. New Mexico’s legislature, controlled by Democrats, has passed a bill that reduces the state’s gross receipts tax—a levy on certain services and transactions—and reduced the state tax on Social Security benefits for most seniors. it also passed a child tax credit.  

The Journal also quoted Wesley Tharpe, deputy director of state policy research at the Center on Budget and Policy Priorities, a left-leaning research and analysis group,  who said, “I think the bottom line is the current surpluses states are enjoying are likely to be fleeting. … That means those structural long-term cuts could be unsustainable over time and could drive really harmful cuts to things like education, health services and the other range of vital services those states and localities provide.”  

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