The Impact of Federal Tax Changes on States
The federal tax changes have caused a lot of anxiety in most of the States since it is observed as a potential mechanism for increasing the state revenue. The changes will be advantageous to many if not all residents of the United States. This is because they will be able to earn more revenue even without doing anything. Based on the fact that the changes on the federal tax law allow for the elimination of many tax brackets, it is therefore important to note that the federal taxes will be assessed more regarding the individual income (Povich n.p). Even though the implementation of these changes might push the taxpayers to pay more, the revenue for the states will be increased and hence leading to an increased service delivery efficiency by those states to their residents.
The Potential Benefits of State Tax Code Revamping
Even though the economic growth related to revamping of the state tax code and lowering the tax rates might take several years to materialize, it is important to take into consideration that the mechanism is meant to ensure that the taxpayers collectively enjoy the benefits of their state revenues. It will act as an ideal mechanism for bringing back the money, even though indirectly, to the taxpayers. According to the federal tax changes, a state like Iowa will stand to gain over $106 million in 2019 and over $138 million in 2020, which is about 2 percent of the $7.3 billion budget of the state (Povich n.p). Since the tax changes are intended to increase investment, it is, therefore, important to note that the process will facilitate faster economic growth than what has been witnessed in the past decades. The changes on the federal tax plan will create an opportunity for the states to earn unexpected extra revenue which will enable them to become flexible in writing their tax codes without creating many losses and the accompanying political hardship. " (314 words)."
Work Cited
Povich, Elaine S. "Federal Tax Changes May Prompt State Tax Overhauls." Huffpost, 2018, https://www.huffingtonpost.com/entry/federal-tax-changes-may-prompt-state-tax-overhauls_us_5a60b7fae4b0f28295459944.
