Reduction or elimination of U.S. state tax payments: another good news for taxpayers

USA Diario
Reduction or elimination of U.S. state tax paymentsPhoto byUSA Diario

A total of 27 U.S. states are reducing the percentages of taxes payable based on income earned by taxpayers.

This is good news since many times we think that we do not make sufficient adjustments in our monthly checks. Then, in many occasions the tax bill arrives very high; we have to pay the federal taxes and what corresponds at the state level.

But, to the taxpayers' delight, at least 50% of the states in the country are reducing or eliminating the percentage to be paid.

In what context is this decision being made?

In the midst of state political actions to strengthen their reserves, some state governments, for the last two years, have exceeded generalized budget surpluses. This is confirmed by a study conducted by the National Association of State Budget Officers.

This implies that billions of dollars were granted by the federal government as financial assistance for the COVID-19 pandemic.

In other words, in 2020, reserves totaled $70 billion and are projected to reach $136 billion by 2023. Moreover, the 2023 amount could well double, according to experts.

This is why many states are reducing tax collections and considering offering property tax cuts. They also plan to send rebate or stimulus checks to help with income taxes.

Some states, such as Arkansas and Mississippi, are even moving toward eliminating the income tax altogether.

These actions not only make states more competitive, but also boost the economic growth of their residents.

This scenario greatly favors the inhabitants of the states that decide to implement the tax reduction. They will be able to breathe easier as they will have the option to fight the high inflation that has been plaguing the country for more than a year.

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