States Sending Out Rebate Checks From Surpluses

Dayana Sabatin
Photo by John Guccione

32 states have enacted on some form of tax cut or rebate, and 15 have already sent or are in the midst of sending out rebates.

California has posted a record $97 billion surplus and is sending rebates that are between $200 and $1,050 to individuals that are earning less than $250,000 annually and households that are earning less than $500,000.

Georgia, Indiana, Idaho, and South Carolina are also making permanent income tax rate cuts.

Tax rebates do little to fight inflation and "might actually be counterproductive" by enabling additional consumer spending on items in scarce supply and thus contributing to higher prices," said Hernan Moscoso Boedo, an economist at the University of Cincinnati.

However, big surpluses, in addition to inflation, can make rebates a very tempting option for politicians, specifically during an election year.

Georgia Gov. Brian Kemp, a Republican facing a re-election challenge from Democrat Stacey Abrams, has been one of the most aggressive tax-cutters. Additionally, he signed legislation that will reduce the income tax rate from 5.75% to 4.99%.

Additionally, he signed a measure providing a $1.1 billion tax rebate, with up to $250 for individuals and $500 for couples.

He has proposed an additional $2 billion in income and property tax rebates.

"We're trying to help Georgians fight through this tough time," Kemp said.

In Colorado, legislative staff estimate it will cost $2.7 million to carry out legislation expediting an income tax refund of $750 for individuals and $1,500 for couples.

Polis, who is up for re-election in November, was a critic of the automatic refund provision.

Idaho Governor Brad Little, a Republican, called the Legislature back for a special session starting Thursday to consider more tax breaks, proposing

to use part of the state's projected $2 billion budget surplus for a $500 million income tax rebate this year.

"Folks, this is conservative governing in action," Little said while asserting the tax cuts still would leave enough money to boost education funding by hundreds of millions of dollars," said Idaho Governor Brad Little.

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