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CEA projects average state sales tax would need to be under 8% (or 6.2% with spending limits) to replace income-tax revenue

True

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The CEA's published analysis reports that replacing state income-tax revenue would require an average state sales tax of under 8% under full revenue replacement with no spending limits, and 6.2% under a scenario that limits spending growth.

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" (published Jan. 28, 2026) includes the lines: "An average state sales tax rate of under 8 percent under full revenue replacement with no limits on spending growth" and "An average state sales tax rate of 6.2 percent under a scenario with spending growth limits." Those exact sentences and figures appear on the White House research webpage and in the downloadable CEA PDF. Verdict: True — the statement accurately quotes the CEA analysis and matches the figures published by the Council of Economic Advisers on Jan. 28, 2026.

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Timeline

  1. Update · Jan 29, 2026, 01:56 AMTrue
    The White House Council of Economic Advisers (CEA) research paper "The Economic Impact of State Income Tax Elimination" (published Jan. 28, 2026) includes the lines: "An average state sales tax rate of under 8 percent under full revenue replacement with no limits on spending growth" and "An average state sales tax rate of 6.2 percent under a scenario with spending growth limits." Those exact sentences and figures appear on the White House research webpage and in the downloadable CEA PDF. Verdict: True — the statement accurately quotes the CEA analysis and matches the figures published by the Council of Economic Advisers on Jan. 28, 2026.
  2. Original article · Jan 28, 2026
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