Eleven states will start the year with an income tax cut: Arizona, Idaho, Indiana, Iowa, Kentucky, Kentucky, Mississippi, Missouri, Missouri, Nebraska, New Hampshire, New York and North Carolina, according to the Tax Foundation.
Only Massachusetts increased its income tax. The state went from a flat tax to a graduated tax that reaches 9% on any income over $1 million. In a reverse move to that of Massachusetts, Arizona, Idaho and Mississippi moved from a graduated-rate income tax to a flat tax in which all income is taxed at the same rate, regardless of income level, the Tax Foundation reported.
Population grows with low taxes
Two states, Hawaii and Illionis expanded their tax programs and reduced the final dollar amount on their final bill, rather than reducing taxable income. States such as Florida, Idaho or North Carolina that have low or no personal income taxes have the highest population growth in the country, according to data provided by the U.S. Census.
Florida has no income tax, while Idaho and North Carolina have a flat (or single marginal rate) income tax.
Hillsdale College economics professor Fary Wolfram said.
States with lower income taxes attract economic activity. The latest census data on state population growth is evidence of the fact. This results in job opportunities and increases in property values that particularly benefit the median income earners.
New York, Hawaii, Oregon and California are among the top ten states with the highest income taxes and shrinking populations, U.S. Census data show. Among them, California ranks first on a 13% income tax.