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Federal Tax Cuts Trigger Stealth Tax Hikes in States

Republicans may have handed many Americans a big cut in federal taxes, but their plan is triggering a wave of state income tax increases across the country.

Republicans may have handed many Americans a big cut in federal taxes, but their plan is triggering a wave of state income tax increases across the country.

In many states, the tax hikes are coming without legislators ever needing to take a vote — thanks to state tax laws that are automatically synched to changes in the federal code. That’s raising fears, particularly among business groups, that instead of reversing the increases, cash-hungry statehouses from New York to Minnesota to Colorado will just let their taxes go up.

“There’s still time in the legislative sessions, and it’s hard to know how many will be there at the end of the session, but thus far, most states are on track to keep the windfall,” said Jared Walczek, a senior policy analyst at the Tax Foundation.

Caroline Cournoyer is GOVERNING's senior web editor.
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