Revenue Changes Make Waves in the States
The massive tax reform measure Congress approved in September was touted by its proponents as being designed to make the tax code fairer, by easing the tax burden on middle-income families and shifting more taxes onto business concerns. But now that tax reform is on its way to becoming law, another battle over the fairness issue may be looming. While tax reform may translate into lower federal tax bills for most taxpayers, preliminary computations show that in many states it will mean higher combined state, local and federal income taxes.
Under the Tax Reform Act of 1986, state and local income taxes in jurisdictions where tax laws are coupled to the federal tax code, will rise automatically. This is ...