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Texas voters are expected to decide whether to make it even tougher for the state to tax residents’ incomes.
The Lone Star State is already one of the seven U.S. states that forgo individual income taxes as of 2019. In November, Texas ballots will ask residents to add a ban on enacting an income tax on individuals to the state’s constitution.
State - Income - Tax - Question - Portion
Is it better to live in a state with no income tax? It’s a great question considering we already have to set aside a portion of our paychecks for the federal government.
The case for removing an individual income tax typically goes like this: states that don’t dip directly into their residents’ pay become beacons for growth. They’re better at creating jobs and keeping a core of young, educated workers from moving to other states.
Residents - New - Hampshire - Tennessee - Chunk
Residents of New Hampshire and Tennessee are also spared from handing over an extra chunk of their paycheck, though they do pay tax on dividends and income from investments.
The American Legislative Exchange Council reports that over the past decade the nine states without a personal income tax have consistently outperformed – on GDP growth, employment growth and in-state migration – the nine states with the highest taxes on personal income.
Others - ALEC - Findings
Others, however, are skeptical about ALEC’s findings.
There is no compelling evidence that states without income taxes are outperforming states that have them or even have relatively high rates, says Michael Mazerov, senior fellow at the Center on Budget and Policy Priorities.
Preserving - States - Investments - Education - Health
“Preserving and enhancing states’ investments in education, health care, roads, bridges, parks, and other infrastructure will do far more to boost inclusive economic growth and the well-being of their residents than will cutting income taxes,” Mazerov says.
The taxation debate is largely ideological. Those with larger paychecks might see the cons of taxing personal income. On the flip side, those...
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