5 States Where Taxes Are Going Up in 2017

Although President-elect Donald Trump has pledged to cut federal taxes, state taxes are rising across the U.S.

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Although President-elect Donald Trump has pledged to cut federal taxes, state taxes are rising across the U.S. as financially strapped states search for funds to repair deteriorating infrastructure and close widening budget shortfalls. In their search for revenue, states have targeted everything from e-cigarettes to lottery winnings.

Even Alaska, long a low-tax haven and one of our 10 most tax-friendly states, is feeling the heat. Alaska currently has no income or state sales tax. But to offset a sharp decline in oil revenues, Gov. Bill Walker has proposed a 3% statewide sales tax, which he says is needed to close the state’s $3.2 billion budget deficit.

Raising existing state taxes or imposing new ones could backfire if they lead to fewer taxpayers. Technology has made it easier for individuals and businesses to move to states—or countries—with lower tax rates, says Joe Henchman, vice president of legal and state projects for the Tax Foundation, a policy research organization based in Washington, D.C. “Everybody is under the gun to be more competitive, whether it’s government or the private sector,” he says.

Here are five states—including three already on our list of the 10 Least Tax-Friendly States in the U.S.—where residents will pay higher taxes in 2017. Take a look.

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.