Red and blue states have sharply diverged in their approaches to taxing constituents in 2026 as GOP-led state legislatures look to cut income taxes across the board and Democrat-led assemblies move to boost state revenue with increased sales and income tax rates.

In 2025, the One Big Beautiful Bill Act introduced a flurry of measures rolling back tax expenses, prompting state Republicans to look at capitalizing on and expanding federal tax breaks in the 2026 legislative session and state Democrats to seek increases in state-level taxes to help fund statewide welfare programs.

Recommended Stories

Gov. Parson calls special session for permanent $700 million income tax cut

Arizona GOP tax plan saves more than estimated

Democratic presidential contenders eye tax cuts to woo GOP voters