Down with Taxes

State tax cuts in 1995

While attention has been focused on the federal government, 21 states cut taxes in 1995 and none raised them, according to In the States: Everything's Coming Up Supply Side, by the Cato Institute's Stephen Moore for A.B. Laffer, V.A. Canto & Associates.

In New Jersey, the state has passed the final 15 percent of Gov. Christine Todd Whitman's promised 30 percent across-the-board income tax cut. Arizona took its first step toward fulfilling Gov. Fife Symington's pledge to eliminate the state income tax over four years by reducing tax rates across all income levels.

Tax cut proposals were scaled back or defeated in several states, however. Virginia Gov. George Allen had proposed a $2.1 billion tax cut over five years, but was unable to get anything through the Democrat-controlled legislature.

And despite its subtitle, the study points out that only 10 states passed tax reductions likely to have substantial supply-side effects. Iowa's increase in the per-child exemption from $15 to $40 will do little to spur economic growth.