A quiet revolution is happening as more and more states are moving towards phasing out their income taxes. They include Arizona, Arkansas, Mississippi, North Carolina, North Dakota, and West Virginia. Add Louisiana, whose voters this past Saturday approved Constitutional Amendment 2. Its passage triggers a series of tax reductions that could soon have the state’s income tax on the path to zero.
Amendment 2 caps the maximum allowable income tax rate at 4.75%, down from 6%. The current rates of 6%, 4%, and 2% would be replaced with lower rates of 4.25%, 3.5%, and 1.85%
It also allows the legislature to further reduce rates with a simple majority, while keeping in place the Constitutional requirement that any tax increase be passed by a two-thirds vote of the legislatures.
Amendment 2 also sets up a trigger that means when tax revenues go up, income tax rates would be automatically reduced — permanently.
Nine states currently have no income tax. Our goal at CTUP is to get every red state in America to eliminate its income tax. No income tax states create about twice as many new jobs as high income tax states.