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"GOP-led states are looking to entice new residents with lower taxes, while Democratic-led states seek higher taxes on top earners to shore up budgets and social services."

Republican-led states are racing each other to flatten, cut and eliminate individual income taxes, with 23 states lowering their top income-tax rates since 2021....

Democratic-controlled states are moving the opposite way, pushing to increase taxes on top earners to combat inequality and plug budget holes....

The middle ground is quickly disappearing. In 2006, 15 states had top income-tax rates on wage income below 5% and just one exceeded 10%, according to the Tax Foundation, a group that favors lower rates and fewer breaks. Now, more than half of the states have gone below 5% and five others plus the District of Columbia are in double digits....

Jared Walczak, who analyzes state policy for the Tax Foundation, said he expects the divergence to continue as states pick one path or the other.

“I expect a hollowing out of the middle,” he said. “There will be very little that’s attractive about being broadly average.”

The article goes into detail on plans in some states, such as Missouri. This is typical, as in these comments about Washington state's new income tax.

“We value having millionaires and billionaires here. We value the jobs that the tech sector and biotech and aerospace and agriculture” bring, [the house majority leader] said. “But we also think that those very highest-income earners can do more to support the things that we need for our state to be a good place to live.”

Drew Stokesbary, the House minority leader, said the tax could spark capital flight and discourage the entrepreneurship that made Washington successful. He attributed the state’s fiscal challenges to excessive spending growth and said he worries that a millionaires tax could expand.