Texas Public Policy FoundationJob growth has been running 80% stronger in low-tax states than in high-tax states since the passage of the Tax Cuts and Jobs Act of 2017 in December 2017. Prior to the change in the tax code, most income tax filers who itemized their deductions could reduce their tax liability by calculating how much they paid in state and local taxes (SALT). As a result of limiting the SALT deduction to $10,000, income tax filers in high-tax states saw a relatively smaller tax cut, losing out on about $84 billion since the tax code was changed. Private sector job growth is now running 80% faster in the low-tax states, 2% annualized compared to 1.1%, up from just a 35% advantage in the prior 23 months. California’s taxpayers paid about $32 billion more in federal taxes, relative to what they could have paid had they lived in one of the 27 low-tax states.

Source: Forbes May 24, 2019 19:07 UTC