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CB&PP: Time for States to Increase Tax Rate on Incomes Over $500k by 1%

The Center on Budget and Policy Priorities has published Raising State Income Taxes on High-Income Taxpayers, by Elizabeth McNichol, Andrew Nicholas & Jon Shure:

Raising income taxes on a small number of states’ highest-earning households can help close budget gaps. Nationwide, some $8 billion could be raised if every state with a personal income tax enacted a 1% rate increase on households making more than $500,000 a year.

Because many filers can deduct state income taxes from their federal taxable income, high-bracket taxpayers will find that state increases end up being smaller than they appear. And, raising taxes, especially on the wealthiest households, is less harmful for the economy than cutting many types of services.


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