Key takeaways:

• Five Republican-led states cut taxes for millionaires this year.
• Cuts like these will lower state revenues by 2.2 billion dollars.
• Millionaires gain over 50 times larger breaks than other families.
• Mississippi and Oklahoma plan to fully repeal income taxes.
• Experts warn these millionaire tax cuts widen inequality.

An unsettling trend is unfolding in five red states. Kansas, Mississippi, Missouri, Ohio, and Oklahoma have slashed income taxes for families earning over one million dollars. A new report by a progressive think tank shows these changes will drain 2.2 billion dollars from state budgets each year. Meanwhile, many low-income families and critical programs face cuts.

How millionaire tax cuts reshape state budgets

Republican lawmakers say these changes will boost growth. However, they mainly favor the richest residents. For example, in Mississippi and Oklahoma, state leaders voted to fully repeal income taxes over several years. Once gone, millionaires in these states will save 130,000 dollars each year. In contrast, middle-class families will see tiny to no benefits.

In Missouri, state legislators did something even bolder. They eliminated capital gains taxes. These taxes apply to profits from selling stocks, bonds, or property. State revenue will fall by more than 100 million dollars annually. As a result, millionaires will pocket on average 43,000 dollars more per year. Non-millionaires will only see an 80-dollar gain.

Millionaire tax cuts versus non-millionaires

The think tank’s analysis highlights a stark gap. In every state studied, the average millionaire tax cut exceeds the average cut for non-millionaires by at least fifty times. In Mississippi and Ohio, that ratio jumps past one hundred times. In simple terms, millionaires win five-figure breaks while everyone else gets just a few dollars back.

This imbalance comes as state budgets strain under rising costs. Programs like Medicaid and the Supplemental Nutrition Assistance Program face significant cuts. These services help low-income families cover basic needs. Yet, lawmakers prioritize millionaire tax cuts over vital safety nets.

State examples in focus

Kansas: The state cut its top income tax rate. Millionaires stand to gain thousands each year. Meanwhile, funding for education and mental health programs faces deep cuts.

Mississippi: Lawmakers pledged to eliminate income taxes entirely. Over the next few years, residents earning over a million dollars will pay nothing. This move will slash state income by hundreds of millions annually.

Missouri: Capital gains tax repeal takes effect next year. The change will cost the state more than 100 million dollars. Again, the richest benefit most. Many schools and infrastructure projects look for new money sources.

Ohio: The state lowered its top income tax bracket. Wealthy families now pay less than before. At the same time, lawmakers cut public transit funds.

Oklahoma: A full income tax phase-out plan will end all state income taxes. Millionaires will see massive savings. Other residents will not gain enough to offset rising local taxes.

Why experts raise alarms

Analysts point out that these millionaire tax cuts are both reckless and unfair. They warn that state budgets cannot sustain such losses. Aidan Davis, a state policy director, argues that giving millions to millionaires makes no sense when basic services suffer.

Moreover, these cuts deepen economic inequality. Dylan Grundman O’Neill, a senior analyst, notes that lawmakers “double down on inequality” with these policies. He adds that they risk critical services like education, health care, and roads.

The path forward

Some states consider reversing course. Citizens and advocates push for more balanced tax plans. They suggest replacing lost revenue with fairer rules. For instance, lawmakers could introduce a modest wealth tax or close corporate loopholes. In addition, they could protect funding for schools and health programs.

Meanwhile, voters can influence state budgets. They can demand transparency and equity from their representatives. They can also support ballot initiatives that limit tax breaks for the wealthy. Finally, they can back candidates who value all taxpayers.

Conclusion

These millionaire tax cuts highlight a clear choice. Republican governors and legislatures chose to cut taxes for the richest while risking cuts to essential services. As states face budget shortfalls, residents will feel real consequences. In the end, many will pay more in local fees or lose vital programs. Only a balanced approach can ensure fair taxation and stable funding for everyone.

Frequent questions

How will millionaire tax cuts affect public schools?

Public schools rely on state funding. When revenue falls, budgets shrink. This can lead to larger class sizes and deferred maintenance.

Are non-millionaires losing benefits?

Non-millionaires see much smaller tax cuts. In some states, they gain just a few dollars. Meanwhile, local taxes or fees might still rise.

Can states reverse these tax cuts?

Yes, state legislatures can change tax laws. However, political will and public pressure must align. It often takes new leadership or ballot measures.

What alternatives exist to millionaire tax cuts?

States could close corporate tax loopholes or adjust property taxes. They might also introduce a moderate wealth tax. These options can protect services and share the tax burden more fairly.