(Molly Bruns, Headline USA) States across the country are cutting taxes as they collect more income-tax revenue while inflation surges, Just the News reported.
Collectively, states have received half a trillion dollars in federal COVID-19 relief since 2020, and they brought in roughly 19% more tax revenue from March 2021 to November 2021 compared with the same period in 2019, according to Pew Research Center.
Both red and blue states are debating cutting various types of taxes—including personal income, property, sales and more.
The nonprofit Tax Foundation released a report stating there were 13 states with legislation that would cut taxes: Colorado, Idaho, Indiana, Iowa, Michigan, Mississippi, Missouri, Nebraska, New York, Oklahoma, South Carolina, Utah and West Virginia.
Facing a potentially devastating 2022 election season, Democrat leaders who previously supported tax increases, such as Illinois Gov. J.B. Pritzker, seem to have changed their minds.
Prtizker has added more than $5 billion in increased or new taxes and fees since taking office, according to the Illinois Policy Institute.
Pritzker has called the cuts a way to “alleviate” the pressure of inflation. The governor is also running for re-election in 2022.
Iowa is looking at eliminating tax brackets and adopting a flat income tax of 4%. They are also looking for ways to decrease spending, shrinking their budget from $8 billion to $2 billion.
“It’s cutting taxes, but it’s also controlling our spending,” Iowa Senate Majority Leader Jack Whitver (R) told Pew. “The states that I think have had struggles with tax reform—they didn’t control their spending.”
Whitver predicted the tax cuts will also help Iowa compete against other states.
“The competition is fierce for citizens and for jobs,” he told Pew. “And we want to make sure that Iowa is looked at as a pro-growth state.”
City and county-level changes have also been implemented, with two dozen cities and counties in Washington state prohibiting local income taxes.
Some believe the tax cuts are a symptom of increased budgets after D.C. handed out so much money in COVID relief.
“This is the inevitable consequence of sending state and local governments money they didn’t need,” Marc Goldwein, senior policy director of the Committee for a Responsible Federal Budget, told Politico. “States literally have more money than they know what to do with.”
The Biden administration is claiming these nationwide cuts are a result of the American Rescue Plan.
“The American Rescue Plan succeeded in sparking more growth, more jobs, less unemployment and more revenue,” said top Biden adviser Gene Sperling.
