State Tax Fairness Advocates to Push Back on Corporate Tax Cuts

The coming year is shaping up to be a historic one for tax policy at both the state and federal levels. Many states will be considering how taxes impact their ability to fund essential services as they grapple with expiring federal relief, growing costs of state tax cuts in recent years, and the likely need to shoulder more responsibility for essential health and education programs as efforts to find tax cuts with budget reductions advance.

Despite these state revenue challenges and a potential need for states to conform their tax codes to federal changes, we will see a growing movement to pass tax justice policies that prioritize communities and support equity and opportunity through fair taxes on wealthier individuals and corporations.

Tax justice is more than a policy approach—it’s a way to improve equity by prioritizing people over profits, combatting tax havens and fostering more progressive tax systems that provide the revenues needed to robustly fund key programs and services that help ensure opportunity for all.

The challenge for tax justice advocates, policymakers prioritizing community investments, and working families is to raise the voices and needs of lower- and middle-income residents.

As laboratories of democracy, states have a responsibility to find solutions to any federal government policies that threaten the health and well-being of their residents. State tax justice advocates are prepared to be at the forefront of the fight against corporate interests and in favor of fair tax policies.

Consider the following to be tax justice advocates’ focus in 2025.

Expiring TJCA

The federal tax code is a powerful tool to shape the economy and guide our nation’s spending priorities. With the Tax Cuts and Jobs Act expiring next year, conservative lawmakers are trying to renew and expand the legislation to cut taxes for the wealthy and well-connected even further. This puts the US at risk of losing an estimated $4 trillion in crucial revenue that could support food assistance, infrastructure, public safety, and education.

To combat this effort, tax-justice advocates will focus on bringing constituents’ perspectives in the states to the halls of Congress. Across states, advocates will also hold events and town halls, communicate with and educate the public, and mobilize community members to prompt elected officials to pass fair tax policies that sustain the programs that matter most for families.

This publicly coordinated effort will work to ensure the rich pay their fair share, both at the state and federal levels, and help build an infrastructure to support candidates who will fight for tax justice in 2026.

Corporate Taxes

Although there is strong support for raising corporate tax rates, Republicans back lowering the corporate tax rate to 15% in 2025. This comes at a time when corporations pay a lower tax rate in many states than they did a generation ago. This has contributed to ominous state budget forecasts while corporate profits remain at near or above record highs.

Yet, in many states, there is a growing tide to ensure the wealthiest corporations pay their fair share and return the revenue generated to communities.

New Jersey in July passed a corporate transit fee—a 2.5% tax on corporate profits over $10 million to support public transit. Maine is now required to provide a corporate tax transparency report so lawmakers can stop corporations from sheltering profits from taxes. These are prime examples of what tax justice advocates support and how they will work to demand tax transparency from multinational corporations and return revenue to communities next year.

We expect to see more of this ahead, with a push in a number of states to adopt worldwide combined reporting. A strong, new corporate tax transparency law in Australia also will provide evidence and momentum in the US for tax justice champions to pursue similar efforts at the state level.

Wealth Taxes

In November, Washington State rejected a repeal of taxes on capital gains over $250,000. With 63% of voters against the measure, the state saved more than $2 billion for child care, early education, and schools over the next five years.

This comes on the heels of success in New Mexico to limit the capital gains deduction for wealthy earners, improving tax fairness in the state and raising revenues for essential programs. Several states seek to model Washington’s and New Mexico’s progress or introduce their own version of capital gains and wealth tax legislation in 2025.

In Connecticut, Hawaii, and elsewhere, we can expect tax justice advocates to launch campaigns to raise revenue through capital gains and other taxes on wealth, as this is a sure way to support tax fairness and increased investments in young children—important plights no matter what one’s political party or zip code.

We’re approaching what will be one of the most consequential years for tax policy in decades—and tax justice advocacy will be critical ensuring that state and federal tax codes work better for our families. Advocates will go on the offensive to raise revenue by pushing for taxes on corporations and the wealthy while also fighting spending cuts amid declining revenues.

As this fight plays out, we will understand the impact of proposed tax policies on the wealthy and well-connected, as well as who will fight for tax justice. From there, the work begins to achieve a world where big business and the ultra-rich contribute their fair share and our communities have the resources they need to thrive.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Amber Wallin is executive director of the State Revenue Alliance and its affiliate, the Alliance Action Fund, national non-profit organizations that support tax justice campaigns and revenue policy advocacy.

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