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States Cut Taxes at the Top and Collect More at Checkout
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Subscribe27 JUL 2026 / ACCOUNTING & TAXES
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Since 1990, US states have consistently cut top personal and corporate income tax rates while increasing sales tax rates. According to data from the Institute on Taxation and Economic Policy, this trend has led to a noticeable shift in who is bearing the financial burden, with lower-income households spending more of their income on taxable goods than higher-income households. This matters as it illustrates the changing nature of tax policy, where states, in a bid to attract businesses and investment, lower income taxes but make life more expensive for average consumers through sales tax hikes.
A state can announce an income tax cut with a ribbon, a podium, and a neat percentage. A sales tax increase arrives differently. It slips into the receipt for school supplies, a replacement appliance, or the Friday takeout order nobody felt like cooking....
Until next time…
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