Also, as state governments cut tax rates, they are moving closer to a flat income tax rate. Thirteen states—Arizona, Colorado, Idaho, Illinois, Indiana, Kentucky, Michigan, Mississippi, New Hampshire, North Carolina, Pennsylvania, Utah and Washington—already have a flat rate. In New Hampshire that rate applies only to interest and dividends and in Washington only to capital gains.

And seven states—Alaska, Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming—have a zero income tax rate. You can’t get flatter than zero. In total, therefore, 20 states have a flat income tax rate.

This is from David R. Henderson, “More Good News on State Taxes,” Institute for Policy Innovation, TaxBytes, February 23, 2023.

Read the whole thing: it’s short.


Airman Spry Shark, Jeremy, and Bill, in the comments below, point out that Washington state, Colorado, and Utah, respectively do not have a truly flat income tax rate. So we’re down to 17. 🙁