Report: Blue states jumped on tax-cut bandwagon in 2014

Report: Blue states jumped on tax-cut bandwagon in 2014
Credit: Bloomberg com

With Wisconsin leading the way, 14 states enacted “significant, broad-based tax cuts” in 2014, according to a report released Wednesday.

Surprisingly, several states controlled by Democrats made the American Legislative Exchange Council list. Then again, 2014 was an election year.

The blue states that made the cut were:

Minnesota: The Democratic stronghold “bowed to economic reality,” said Jonathan Williams, director of ALEC’s Center for State Fiscal Reform. The cuts in corporate taxes, however, will be largely offset by $2.1 billion in tax increases enacted in 2013.

New York: The Empire State increased its death-tax exemption and lowered its corporate tax rate.

Maryland: After raising taxes and fees 100 times under Democratic Gov. Martin O’Malley, the state increased the exemption on its death tax, nearing the federal rate.

Rhode Island: The state cut corporate taxes, while broadening them. It also raised the death-tax exemption, but hiked other fees. ALEC called Rhode Island’s actions a “close call.”

By comparison, Wisconsin, under Republican Gov. Scott Walker, slashed some $800 million in taxes, making the Badger State No. 1 on ALEC’s scorecard.

Other tax-cutting states were Arizona, Florida, Indiana, Kansas, Michigan, Missouri, Nebraska, Ohio and Oklahoma. (See the full list of states and savings here.)

Looking ahead, Williams and research analyst Ben Wilterdink predicted 2015 will be a “record-breaking year” for state tax reductions.

“Lots of pro-growth candidates were elected,” said Williams, citing new governors in Nebraska and Arizona.

ALEC did not list states that raised taxes, but Williams said there was “no good news” in purple-state Virginia, where Democratic Gov. Terry McAuliffe is wrapping up his first year in office.

The tax issue could embroil Republicans in Richmond, Virginia, as former Stafford County supervisor Susan Stimpson wages a primary bid for House Speaker Bill Howell’s seat in the General Assembly.

“Bill Howell has been the consistent force behind every major tax increase in Virginia in the last decade,” Stimpson said this month.

PolitiFact rated Stimpson’s charges “mostly true.”

ALEC is a fiscally conservative policy shop, but some Democrats have acknowledged the importance of tax cuts and lower spending at the national level.

Christina Romer, who formerly chaired President Obama’s Council of Economic Advisers, has written that tax increases “can have a substantial chilling effect on the economy.”

Read more by Kenric Ward at Watchdog.com.

Kenric Ward

Kenric Ward

Kenric Ward is a national correspondent and writes for the Texas Bureau of Watchdog.org. Formerly a reporter and editor at two Pulitzer Prize-winning newspapers, Kenric has won dozens of state and national news awards for investigative articles. His most recent book is “Saints in Babylon: Mormons and Las Vegas.”


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