It is interesting to see how Republican (and ALEC-backed) tax changes seem to go from one state to another, like some kind of hideous virus. For instance, Kansas went with the pass-through tax exemption, then Ohio and Missouri followed suit. Ohio got rid of the business personal property tax, now Michigan is following. Very rarely do these changes benefit people at the lower end of the income spectrum.• Kansas enacted more changes to its personal income tax on top of those already passed in 2012. Tax rates are gradually reduced to 2.3 and 3.9 percent and both standard and itemized deductions are pared back. The food sales tax rebate was reinstated, but made nonrefundable. If revenue targets are reached in future years, the income tax could be repealed entirely. Kansas also increased its sales tax from 5.7 to 6.15 percent.• North Carolina replaced its graduated personal income tax rate structure with a flat rate of 5.75 percent and enacted several other changes to the tax including: the elimination of all credits except for the child tax credit (this included allowing the state’s Earned Income Tax Credit to expire), elimination of personal exemptions, elimination of a $50,000 deduction for business pass-through income, an increased standard deduction, eliminating most itemized deductions and subjecting property taxes and mortgage interest to a $20,000 cap and allowing unlimited charitable contribution deductions. The package also expanded the sales tax base, increased sales taxes on electricity, and phases-in a corporate income tax rate cut that will eventually bring the rate from 6.9 to 3 percent.• Ohio reduced personal income tax rates across the board and exempted 50 percent of business pass-through income from the tax (capped at the first $250,000). The state also enacted a very limited nonrefundable EITC equal to 5 percent of the federal credit in 2013 and expanded it to 10 percent in 2014. At the same time, the state’s sales tax was increased from 5.5 to 5.75 percent and its base was expanded.• The District of Columbia cut income tax rates for middle-income residents and increased the standard deduction. Further rate cuts, as well as increases in the standard deduction and personal exemption, could take effect if revenue grows sufficiently quickly. The District of Columbia also phased-out its personal exemption for high-income taxpayers and made permanent its 8.95 percent income tax bracket on high-income earners. The city’s EITC was expanded for childless workers and its property tax circuit breaker was enhanced. The business franchise tax rate was cut from 9.975 to 9.4 percent, and could see further cuts to 8.25 percent contingent on revenue growth. DC’s sales tax base was also expanded, while its rate was lowered from 6.0 to 5.75 percent. The city also reformed its gas tax so that the rate can grow alongside gas prices in the future.
No matter how you figure it, people making less than $250,000 and voting Republican are suckers.