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Lower Taxes, Work from Office: A Look at How the American Economy Stands After the Covid Pandemic

According to recent reports released by the US government, businesses and individuals across the nation should expect to witness income tax cuts across 17 US states in the year 2024. Some of these changes are already in motion since January 1st and others are expected to go live July 1st, which is the official start of the fiscal year in many US states, according to the non-profit Tax Foundation, a well-known Washington based think tank.

For this fiscal year, companies across the states of Arkansas, Iowa, Kansas, Nebraska, New Jersey, and Pennsylvania are set to enjoy lower corporate income tax bills while 14 states, majority of which are located in the South, will experience individual income tax rate reductions.

Tax Reforms, Lower Rates, and a Stable Present 

These changes come amidst a wave of tax changes across 34 states, with a firm mission of fostering economic growth throughout the nation through implemented tax policies. According to the data provided by the foundation, for the past several years, the country has seen frequent tax reforms, including rate reductions and tax cuts, as the nation emerged from the economic ruins left behind by the COVID pandemic, with revenue surpluses and stared down inflation.

Tax Foundation has announced that the decline in business tax rates have differed from state to state. Among the states with lower tax burdens is Arkansas, where corporate income tax rates are dropping to 4.80% this year from 5.30% in the economic year 2023.

On the other hand, New Jersey’s rates are expected to fall to 9% from a high point of 11.5%, while business rates in Kansas are expected to go further down to 6.5% from 7%. Nebraska and Pennsylvania are also a part of the race, with the rates going down to 5.84% from 7.25% and 8.49% and 8.99% respectively.

Other states across the United States have taken different measures to ease the tax pressures on existing businesses. For example, Florida reduced its tax on business rent while Ohio increased its CAT (Commercial Activity Tax) gross receipts threshold. Texas is also planning to double the so-called “no tax due” threshold for the state’s franchise tax.

Varying States, Varying Needs 

According to Tax Foundation reports, the residents of Arkansas, Georgia, Connecticut, Indiana, Iowa, Mississippi, Kentucky, Missouri, Montana, Nebraska, New Hampshire (interest and dividends income only), Ohio, South Carolina and North Carolina can expect to enjoy income tax rate reductions in the near future.

Although so many states across the United States are undergoing these economic changes, not all state taxes are falling. It is expected that Michigan residents will see individual income tax rate inch up to 4.25% from the previous year’s rate of 4.05%.

Ever since the nation started rebuilding its economy using the fragments left behind by the COVID pandemic, workers have resumed to their office jobs, directly helping to boost income taxes. In addition to this, consumers are spending more than ever, helping to further bolster sales tax revenue. Experts and analysts across the United States have seen this move of lowering taxes as a leap of faith taken by the US authorities and government to motivate the local population to chase higher paid white-collar workers who, after the pandemic., are looking to shift to remote work permanently.

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