Taxes fall, wages rise by new state laws

Taxes will fall and minimum wages rise for residents in numerous states as a variety of new laws take effect Sunday that could impact people’s finances and, in some cases, their personal liberties.

ABORTION

After the U.S. Supreme Court overturned the 1973 Roe v. Wade ruling in June, abortion access became a state issue. Laws in place in 13 states, most of them controlled by Republicans, ban abortion at all stages of pregnancy, with varying exceptions. Meanwhile, more liberal states have been extending abortion protections.

Laws taking effect in January are not wholesale policy changes but are intended to make abortion more accessible in California and New York. Abortion already is legal in those states through viability, which is about 24 weeks gestational age.

TAXES

Thanks to large budget surpluses, about two-thirds of the states approved permanent tax cuts or one-time rebates last year. Several of those will take effect in January.

Income tax cuts mean less money will be withheld from workers’ paychecks in Idaho, Indiana, Kentucky, Mississippi, Missouri, Nebraska, New York, North Carolina and South Carolina.

Iowa will revamp its income tax brackets as a first step toward an eventual flat tax.

Other states are providing tax incentives for law-and-order professions. Rhode Island will exempt military pensions from tax. Georgia will offer a tax credit for donations to local law enforcement foundations.

But not all taxes will be going down. A voter-approved “millionaire tax” will take effect in Massachusetts, imposing a 4% surcharge on income of more than $1 million.

WAGES

Minimum wage workers will get a pay raise in 23 states as a result of laws passed in previous years, some of which provide annual inflationary adjustments. The increases range from an extra 23 cents in Michigan to an additional $1.50 in Nebraska, where a ballot measure approved in November will raise the minimum wage from $8 to $9.50 an hour.

The gap continues to grow between the 20 states following the federal minimum wage of $7.25 an hour and the 30 others requiring more. The highest state minimum wage now will be $15.74 an hour in Washington — more than double the federal rate.

Another law taking effect with the new year will require employers in Washington to include salary and benefits information in job postings, rather than waiting until a job offer to reveal such information. Similar salary transparency laws are in place in half a dozen other states.

CRIMINAL JUSTICE

Cash bail will be eliminated for people accused of crimes in Illinois. Requiring bonds to be posted has long been a way to ensure people who are arrested show up for their trials, but critics say the system penalizes the poor. Eliminating cash bail puts Illinois in a group of states including California, Indiana, New Jersey, Nebraska and New York that have prohibited or restricted the practice.

In November, voters made Maryland the 21st state to legalize recreational use by adults. That begins on July 1, 2023.

In Connecticut, some provisions of a 2021 law that legalized recreational marijuana also kick in. Twenty-one other states have expungement laws.