The state’s Democratic governor wants to give most of that money back to Minnesotans through tax cuts aimed at low- and moderate-income families; the Republican-controlled legislature wants broader-based tax cuts. Apart from the nine states with no broad-based income tax, nearly every state will face a similar decision. Almost all of the states base their tax codes in some way on federal definitions of income, before applying their own adjustments and deductions and setting their own tax rates. The federal tax overhaul, which eliminated or capped several deductions and exemptions, effectively broadened what counts as income for some families. At the federal level, those changes were more than offset for most families by lower tax rates and an increased child tax credit.

Source: New York Times May 12, 2018 17:03 UTC