Concerned about the effects of the Republican tax overhaul on their local economies, some state legislatures are considering revamping their own tax systems to address everything from lost tax deductions to growing income inequality. Here’s a rundown some of those efforts, based on an analysis by the liberal-leaning Institute on Taxation and Economic Policy:
- New Jersey Gov. Phil Murphy is pushing for a temporary millionaire’s tax, driven by the windfall bestowed on wealthier residents by the federal tax law.
- New York is considering the expanded use of a payroll tax, which is deductible, to make up for new limits on state and local tax deductions.
- California, Connecticut, Illinois, Nebraska, New York, Virginia and Washington may convert state and local tax payments into “charitable contributions” in order to restore lost tax credits.
- California is also considering a bill that would apply a special tax on highly profitable companies, allowing the state to tap into increased corporate profits.
- Nebraska may maintain a personal exemption credit that is set to be eliminated.
- Vermont, Minnesota and Utah are considering comprehensive tax reform to address issues that have emerged in the wake of the new federal rules.
Not all states are looking for ways around the new tax rules, though. Some are embracing the spirit of the new law and looking to slash taxes at the state level:
- Georgia, which expects to see a windfall of up to $1 billion due to the new tax rules, is considering a big tax cut.
- Idaho, Iowa, Michigan and Missouri are also mulling state-level tax cuts.