Tax Foundation Analysis Ranks Impact of Bush Tax Cuts on States

Article excerpt

A new report from the Tax Foundation found that almost every income group in every state benefited from the Bush administration tax cuts of 2001 and 2003, ranking them by dollar amount and percentage savings.

"These new data let us see how the recent tax cuts have played out along the income spectrum within each state, as well as which states have benefited most," said Gerald Prante of the foundation.

Prante explained that the foundation calculated tax payments in dollars for the average tax return in each income range, using effective tax rates in 2000 and 2004.

Nationally, according to the foundation, the average taxpayer saw a 23-percent reduction in income taxes during this period. Percentage cuts ranged from a low of 15.2 percent for those earning $200,000 or more to 27.5 percent for those earning between $75,000 and $99,999.

States that realized the greatest dollar-amount savings were Massachusetts, Washington, Connecticut, California and New Hampshire. The five bottom states were New Mexico, North Dakota, Montana, West Virginia and Hawaii.

In percentage savings, Mississippi, Louisiana, Washington, Idaho and Colorado came in at the top, with the smallest percentage cuts in New Mexico, Maryland Rhode Island, New York and Nevada.

Highest dollar savings went to the $200,000-and-up income group in Wyoming, with an average tax-burden drop of $57,000.

The foundation determined that the income group with the greatest percentage drop in tax payment was Utah's lowest income group, due in large part to expansion of the child tax credit in a state with a high percentage of children.

Under the foundation's analysis, overall Oklahoma taxpayers saw their federal income taxes drop by $1,013, or 22. …

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