The Tax Foundation has cross-tabulated state demographics with tax data from the Internal Revenue Service to take a look at which states benefited the most from the tax cuts enacted under the Bush administration in 2001 and 2003. 

Foundation staff economist Gerald Prante found that no matter which way the cuts were measured -- either by subtracting the 2004 payment for the average tax return, within each income range, from the corresponding figure in 2000, or by computing the percentage drop -- some states fared better than others. Washington, Colorado and California were all huge beneficiaries, while the trio of New Mexico, Hawaii and North Dakota received the least tax relief.

However, Prante wrote that by defining the benefits of tax cuts in different ways, there could be different conclusions about what states benefited the most.

Defined in dollar terms, high-income earners and high-income states benefit the most. Topping that breakdown were Massachusetts, Washington, Connecticut, California and New Hampshire. At the other end of the spectrum, the bottom five states were New Mexico, North Dakota, Montana, West Virginia and Hawaii.

But judged by what states’ residents received a bigger tax cut in percentage terms, low-income earners and low-income states benefit the most. In terms of percentage savings, the winners were Mississippi, Louisiana, Washington, Idaho and Colorado. The smallest percentage cuts were in New Mexico, Maryland, Rhode Island, New York and Nevada.

The full tax note is available at

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