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CEA projects average wages to rise by $4,000 per state after eliminating income tax

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The CEA's published analysis reports an average wage increase of $4,000 for the average state under the modeled income-tax phase-out scenarios.

Source summary
A White House (CEA) research paper examines the economic effects and feasibility of states phasing out personal income taxes. It models two scenarios—full revenue replacement through broadening the sales tax, and replacement combined with limits on spending growth—and reports state-by-state impacts on GDP, wages, startup formation, and high-income migration. The CEA finds average gains such as a 1–1.6% rise in state GDP, 16–19% more startups, a $4,000 increase in average wages, and estimated average state sales tax requirements of under 8% (or 6.2% with spending limits).
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Latest fact check

The White House Council of Economic Advisers (CEA) research paper "The Economic Impact of State Income Tax Elimination" (Jan. 28, 2026) lists under its key findings: "A $4,000 increase in the average wage." The downloadable PDF of the paper and the White House research page reproduce that $4,000 figure as a headline quantitative result from CEA’s analysis. Verdict: True — the CEA report published by the White House explicitly reports a $4,000 increase in the average wage as a key finding; consult the full report for scenario assumptions and state-by-state detail.

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Timeline

  1. Update · Jan 29, 2026, 01:52 AMTrue
    The White House Council of Economic Advisers (CEA) research paper "The Economic Impact of State Income Tax Elimination" (Jan. 28, 2026) lists under its key findings: "A $4,000 increase in the average wage." The downloadable PDF of the paper and the White House research page reproduce that $4,000 figure as a headline quantitative result from CEA’s analysis. Verdict: True — the CEA report published by the White House explicitly reports a $4,000 increase in the average wage as a key finding; consult the full report for scenario assumptions and state-by-state detail.
  2. Original article · Jan 28, 2026
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