CHARLOTTESVILLE, VA — A new state-by-state analysis released by InvestorsObserver says tax changes tied to President Donald Trump’s tax legislation could leave some of the nation’s poorest households paying more while delivering significantly larger tax cuts to higher-income Americans.
The report, based on data from the Institute on Taxation and Economic Policy (ITEP), examined how the law’s tax provisions affect different income groups across all 50 states.
According to the analysis, in nine states the lowest-income households would see their taxes increase rather than decrease, while wealthier households in those same states would receive thousands of dollars in tax relief annually.
Florida’s lowest-income households face the largest increase among those states, paying about $150 more in taxes each year, the report said. In contrast, the state’s wealthiest households would receive an average annual tax cut of about $20,160.
Other states where the poorest households face increases include Wyoming, North Carolina, Oklahoma, South Carolina, Nebraska, Alabama, and Kansas, where the increases range from about $10 to $90 annually.
Researchers said the disparity between income groups is particularly pronounced in several states. In Montana, the report found that the wealthiest households receive tax reductions 2,194 times larger than those available to the lowest-income taxpayers.
In practical terms, the analysis estimated that Montana’s poorest residents receive about $10 in annual tax relief, while the wealthiest households receive roughly $21,940.
Similar gaps appear in other states, according to the report. In South Dakota, the wealthiest households receive tax cuts averaging $17,140 compared with about $10 for the lowest-income residents. In Arizona, the gap is about $15,470 for top earners compared with $10 for the poorest households, and in Idaho the difference is roughly $8,600 compared with $10.
Georgia also shows a significant difference, with wealthy households receiving an average tax cut of about $18,850 while the poorest residents receive about $24, according to the report.
The analysis also examined how meaningful the tax cuts are for middle-income households, comparing annual savings with typical mortgage payments.
In eight states — California, New York, Hawaii, Maryland, Massachusetts, Oregon, New Mexico, and Colorado — the report found that the tax savings for middle-income households would not cover the cost of a single monthly mortgage payment.
For example, California’s middle-income households receive an average annual tax reduction of about $2,130, which the report said is equivalent to about three weeks of mortgage payments in the state.
By contrast, the report said the tax savings for middle-income households stretch further in lower-cost states such as West Virginia, Indiana, and Kentucky. In West Virginia, for example, the average middle-income tax cut could cover roughly two months of mortgage payments.
The report said location plays a major role in how much relief households receive. States with lower housing costs often see tax savings cover more living expenses, while higher-cost states provide smaller real-world benefits from the same dollar amounts.
High-income households, meanwhile, receive the largest tax benefits across nearly all states, the report said.
In New Jersey, the wealthiest households receive tax cuts averaging about $22,160 annually while the poorest households receive about $130. In California, top earners receive about $21,950 compared with roughly $70 for low-income households.
The report also identified several states where the poorest households receive somewhat larger tax cuts compared with others, though the amounts remain relatively small.
Minnesota, Washington, New Hampshire, Alaska, and New York provide the largest average tax reductions for the lowest-income households, ranging from about $160 to $240 annually.
InvestorsObserver said its analysis relied on data from ITEP’s microsimulation model, which estimates how tax laws affect households across different income levels.
The study also incorporated mortgage cost data from the U.S. Census Bureau and Motley Fool Money to translate tax savings into estimated months of mortgage payments covered by the tax cuts.
Sam Bourgi, a senior analyst at InvestorsObserver, said the results suggest the law shifts the largest benefits toward higher-income taxpayers.
“When wealthy households receive $20,000 tax breaks, much of that money gets saved or invested, not spent in local economies,” Bourgi said. “When working families get $100, or lose $150, they’re forced to cut back on essentials.”
ITEP’s analysis groups taxpayers into income categories including the bottom 20 percent of earners, with an average annual income of about $15,200; middle-income households with an average income of about $121,000; and high-income households averaging about $530,400 annually.
Researchers said the study focuses only on the tax provisions included in the legislation and does not account for other economic factors, such as tariffs or broader economic policy changes, that could affect household costs.
The report concludes that while the tax law provides measurable benefits to some households, the largest gains are concentrated among higher-income taxpayers, with relatively limited relief for lower-income families in many states.
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