While States Debate New Trump Tax Changes, Equity Must Be at the Core
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US states are debating whether to conform to the 2025 federal tax law changes, which could impact economic and racial equity in their tax codes. Linking to certain federal tax provisions could worsen inequality and reduce state revenue for public programs.
States are debating whether to link their tax codes to the 2025 federal tax law, which has significant implications for economic and racial equity. The new law, passed by President Trump and Congress, resulted in a massive giveaway to the wealthy. Most states already have a regressive tax code, and conformity to certain federal tax provisions could worsen inequality. States must carefully evaluate the cost and equity implications of each federal tax provision before deciding whether to incorporate it into their own tax code. Linking to some provisions will reduce vital revenue for programs that support racial equity, potentially widening racial inequities. States need to consider the impact on their ability to fund public services that strengthen families and communities.
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