With the new year starting, questions concerning budget and finance are gaining traction, with several Americans wondering about taxes and inflation. Fortunately, based on data from the Tax Foundation, a non-partisan group of lobbyists demanding tax reductions, 12 states leaning to the right are expected to have taxes reduced this year.
1. Arkansas
This Republican-led state is expecting a drop in taxes. In January, Arkansas witnessed the top individual income tax rate drop to 4.4% from the previous year’s 4.9%. Such a change can speed up the rate reductions that were otherwise scheduled for 2025.
2. Connecticut
Connecticut is hopping on the tax-relief bandwagon by decreasing the 3% individual income tax bracket to 2%. It is also dropping the 5% bracket to 4.5% in 2024. It must be noted that this relief does not apply to single individuals earning $150,000 or above and married couples with an income of $300,000 or above. The top marginal rate is unchanged.
3. Iowa
In 2024, Iowa will be dropping its top marginal rate to 5.7%. As per the 2022 $1.9 billion tax cut signed by Republican Gov. Kim Reynolds, The Hawkeye State is also hoping to hit a flat tax rate of 3.9% in 2026.
4. Georgia
The Peach State is expected to provide tax relief to residents in 2024. According to the 2022 legislation signed by Republican Gov. Brian Kemp, it is anticipated that Georgia will get rid of the six individual income tax rates in exchange for a 5.49% flat rate.
5. Indiana
For the 2024 filing year, The Hoosier State is going to speed up the tax rate cuts it enacted previously. The red-leaning state will witness a drop in individual income tax rate from last year’s 3.15% to 3.05% in 2024.
6. Mississippi
In 2024, the individual income tax rate will drop to 4.7% compared to 2023’s initial rate of 5%. However, this relief is only applicable to individuals with income over $10,000. Additionally, The Magnolia State is seeking to drop the rate further to 4.4% and 4% in 2025 and 2026, respectively.
7. New Hampshire
New Hampshire is taking a different approach altogether. Instead of reducing income taxes, The Granite State is easing off the taxes on interest and dividends. Compared to 4% in the previous year, the tax rate for 2024 will drop to 3% before getting eliminated in 2025.
8. Montana
The Treasure State, committed to providing relief to overburdened residents, passed a tax overhaul in 2021.
Big Sky Country has combined seven tax brackets into two, and starting in 2024, the top rate will be reduced to 5.9% compared to last year’s 6.75%, while the lower rate will go down to 4.7%. The higher rate is only applicable to income over $20,500 for single taxpayers and $41,000 for couples who are filing jointly.
9. Nebraska
The Cornhusker State is working towards an accessible and affordable livelihood for its residents. For all income over $100,000, Nebraska will be decreasing the top marginal tax rate from the previous year’s 7.25% to 5.84% in 2024. The ambitious red state is seeking to reduce the rate to as low as 3.99% by 2027.
10. North Carolina
As countless Americans fight inflation, North Carolina provides relief by lowering income taxes this year. In 2024, the flat income tax rate will fall from 4.75 to 4.5%, a 0.25% decrease compared to the previous year.
11. South Carolina
In 2024, The Palmetto State is expected to drop the top individual income tax rate from last year’s 6.5% to 6.4%. Additionally, South Carolina anticipates a further 0.3% reduction, lowering the rate to a glorious 6%.
12. Ohio
Ohio is another red state that’s trying to provide some relief to exhausted Americans fighting with ever-increasing inflation. As per the legislation passed in 2023, the state combined the top two marginal individual income tax rates into one. The consolidated rate is set at 3.5% in 2024.
