Federal Tax Cuts Adversely Affecting State Revenues.

• Position: News Briefs - Brief Article

* The $1.35 trillion tax-cut bill signed into law by President Bush in June may have lined the pockets of taxpayers, hut it is expected to have the opposite effect on state treasuries. Since the 1920s, states have linked their estate tax formulas to a tax credit in the federal tax code. The gradual phasing out of this credit is expected to eliminate the estate tax in 40 states and significantly reduce it in the other 10. The National Governor's Association estimates that the states will lose between $50 and $100 billion in estate tax revenue over the next 10 years. The legislation also threatened to dramatically reduce the income tax revenue of...