President Donald Trump has floated a bold idea—getting rid of federal income taxes altogether. Instead, he proposes making up for the lost revenue through high tariffs on countries like China, Mexico, and Canada. While some states with high tax rates would see a big boost from this move, others wouldn’t feel much of a difference when it comes to their paychecks.
If income tax is eliminated, states with lower earnings and existing tax benefits won’t experience the same dramatic change as high-tax states like California or New York. Here’s a look at 10 states where residents would see the smallest increase in take-home pay.
1. Mississippi
Workers in Mississippi would see a modest bump in their paychecks. Currently, the average bi-weekly paycheck after federal tax is $1,347. If federal taxes were removed, that number would rise to $1,657—an increase of about 23%. While this is good news, Mississippi’s lower wages overall mean the impact wouldn’t be as significant compared to other states.
2. Louisiana
Louisiana follows closely behind, with bi-weekly earnings jumping from $1,481 to $1,827—a 23.4% increase. Since Louisiana already has lower average salaries, the removal of income tax wouldn’t bring the kind of game-changing financial relief that higher-earning states might experience.
3. West Virginia
West Virginia workers currently take home $1,388 every two weeks after federal tax. Without it, their paychecks would rise to $1,716—an increase of 23.6%. While that sounds like a nice boost, the overall wages in the state remain on the lower end, limiting the overall impact.
4. Arkansas
In Arkansas, the bi-weekly paycheck would rise from $1,405 to $1,740—a 23.8% jump. But given the lower cost of living and already lower wages, this change wouldn’t shake things up as much as it would in states with higher income brackets.
5. New Mexico
New Mexico residents currently earn around $1,477 every two weeks after taxes. Without federal income tax, their paychecks would grow to $1,835—an increase of 24.2%. While this is a positive shift, the effect is muted compared to states with a higher cost of living.
6. Kentucky
Kentucky’s workers would see a paycheck increase from $1,491 to $1,855—about a 24.4% jump. While that’s certainly a boost, Kentucky’s lower average wages mean that the additional income won’t stretch as far as it might in states with higher salaries.
7. Oklahoma
Oklahoma would experience a similar situation, with bi-weekly earnings increasing from $1,558 to $1,938—an increase of 24.4%. While this extra income helps, it’s not a groundbreaking shift in financial standing for residents.
8. Alabama
Alabama workers currently bring home $1,472 after federal taxes every two weeks. If those taxes disappeared, their take-home pay would jump to $1,832—a 24.5% increase. However, Alabama’s lower average income means the impact on overall financial well-being remains relatively modest.
9. Tennessee
Tennessee residents would see a slight improvement, with bi-weekly earnings going from $1,640 to $2,051—a 25.1% increase. While this would be a welcome change, Tennessee already has no state income tax, so the overall effect on paychecks isn’t as dramatic as in states with both federal and state income taxes.
10. Wyoming
Wyoming workers would see the smallest impact relative to other states, but they’d still get a raise. Bi-weekly paychecks would rise from $1,956 to $2,463—a 25.9% increase.
However, since Wyoming already has no state income tax and higher wages compared to other states on this list, the overall difference wouldn’t be as game-changing.
Final Thoughts
Trump’s idea of replacing income taxes with tariffs could have mixed effects. High-tax states might celebrate the move, but in lower-tax states like Mississippi or Wyoming, the impact would be far less noticeable. While more money in the paycheck sounds great, the long-term economic effects—such as higher prices due to tariffs—are still a major factor to consider.
Would eliminating federal income tax be a win for all Americans? That remains up for debate. But for these 10 states, the change might not be as impactful as some would expect.
