The 2024 election is here and voters across the United States face crucial decisions on tax policy through various state ballot measures.
If voters approve, these initiatives could significantly impact state revenues, individual tax burdens, and the overall fiscal landscape in several places for years to come.
Let's look at some of the most controversial tax-related ballot measures voters will decide — Election Day is today, Tuesday, November 5.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Washington capital gains tax repeal
As Kiplinger has reported, one of the most closely watched measures is Washington state's Initiative 2109, which would repeal the state's recently implemented capital gains tax.
The 7% tax on capital gains over $250,000 went into effect two years ago after being upheld by the state’s Supreme Court.
Proponents of the repeal argue that the tax discourages investment and harms the state's business climate. Opponents contend that the tax affects only a relatively small amount of ultra-wealthy residents and provides crucial funding for education and early learning programs.
For more information, see Capital Gains Tax Repal on the Ballot: What to Know.
Oregon corporate tax and universal rebate
Oregon voters will decide on Measure 118, which proposes a significant change to the state's corporate tax structure. The measure would increase the corporate minimum tax to 3% on in-state business sales exceeding $25 million annually.
The revenue generated would fund a universal tax rebate program, potentially providing cash payments to all Oregon residents. Early estimates are that the rebate amounts would be around $1,600 a year per eligible Oregonian.
While direct payments to citizens appeal to many, critics argue that the measure could harm the state's economy and business environment and potentially raise corporate taxes by just under $7 billion a year.
North Dakota property tax elimination
A potentially historic proposal is North Dakota's Initiated Measure 4. This measure would eliminate state and local property taxes on the state's personal and residential property, except for bond payments.
As Kiplinger has reported, if voters approve, North Dakota would be the first state in the U.S. to eliminate its primary property tax.
While abolishing property taxes might appeal to many homeowners, the initiative raises questions about how the state would replace this significant source of revenue. About 10% of North Dakota’s revenue comes from property taxes, which help fund local governments and school districts.
Voters defeated a similar measure more than ten years ago.
For more information, see Will North Dakota Property Tax Be Eliminated?
New Mexico Veteran property tax exemptions
New Mexico has two constitutional amendments on the ballot related to property tax exemptions for Veterans.
One would extend the disabled veteran property tax exemption to all disabled veterans proportionally based on their disability rating. At the same time, the other would increase the general veteran property tax exemption and index it to inflation.
These measures could provide significant tax relief to Veterans but may also impact local government revenues.
Notably, Virginia has a Veteran property tax measure on its ballot that would change the Virginia constitution to allow exemptions for surviving spouses of certain Veterans.
A total of 8 states have property tax-related measures on the November ballot.
Illinois millionaire tax proposal
Illinois is presenting voters with an advisory question regarding implementing a 3% surtax on income over $1 million. This comes after a failed attempt four years ago to amend the state's constitution for a graduated income tax system.
The current proposal is designed to gauge public opinion on using revenue from high-income earners to fund state property tax relief.
While non-binding, the outcome could influence future legislative action on tax policy in Illinois.
South Dakota grocery tax
South Dakota's Initiated Measure 28 would eliminate the state sales tax on items sold for human consumption, primarily targeting grocery purchases (essentially grocery taxes).
While supporters argue it would ease the financial burden on consumers, the measure's broad language has raised concerns about taxes on a wide range of products, including toiletries, cigarettes, and tobacco products.
Some say this could lead to revenue losses for South Dakota, generally estimated at around $133 million a year.
For more information, see Food Tax: Which States Still Tax Groceries?
Nevada making diapers tax free
In a more targeted approach to tax relief, Nevada voters will decide on Question 5, which would exempt diapers from the state's sales and use tax. While seemingly minor, this measure marks a trend of states considering targeted sales tax exemptions for essential items.
Currently, most states still tax diapers, which adds to families' already high costs of essentials.
For more information, see Kiplinger's report on states with diaper taxes.
Election 2024: Bottom line
In a presidential election year, focusing on the top of the ticket is understandable.
To that point, federal income taxes and tax policy have been a focus of both campaigns, despite polling indicating that tax isn't top of mind for many voters this election cycle.
Still, as voters head to the polls, key state tax measures matter. The outcomes, which often impact local funding, could significantly shape state tax policies and affect your personal budget.
Related
-
This 401(k) Withdrawal Snafu Could Knock Your Portfolio off CourseFew financial advisers have heard of this 401(k) withdrawal issue. Here's how to safeguard your portfolio.
-
A Financial Checklist for Your College-Bound KidsIs your child heading off to college this fall? If so, make sure they're prepared and protected in these four key areas.
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Technology Unleashes the Power of Year-Round Tax-Loss HarvestingTech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
-
Summer Is Made for Sun, Fun … and Estate Planning ConversationsNow is the time to discuss estate planning with your loved ones to ensure the Great Wealth Transfer is efficient, tax-aware and in line with your legacy goals — not Uncle Sam's.
-
Don't Have an Estate Plan? Six Things That Could Go Very WrongBad things can happen when you're unprepared, such as big-time taxes and family turmoil. Generational planning can help protect the people you love. Here's some expert advice to help you out.
-
The $1 Million Retirement Question: Are You Being Tax-Smart About Your Pension?A financial planner raises some key considerations for navigating retirement with a pension and recommends four strategies.
-
Divorce and Your Home: An Expert's Guide to Avoiding a Tax BombYour home is probably your biggest asset, so if you're getting a divorce, the stakes are high. Keep it? Sell it? You need to have a good plan in place for how to handle it.
-
Fewer Agents, Fewer Audits: How IRS Staff Cuts Are Changing EnforcementSignificant reductions in the IRS workforce appear to be increasing the number of 'no change' audit closures. The shift could potentially increase the overall tax gap — the difference between taxes that should have been paid and those that were.
