Paul L. Caron

Wednesday, October 14, 2009

State & Local Tax Revenues by Source

The Tax Foundation has examined newly-released Census data to explain Where Do State and Local Governments Get Their Tax Revenue?  The report breaks down state and local tax revenues by six sources for each state (as well as for the U.S. average):

  • General Sales Taxes
  • Selective Sales Taxes (e.g., taxes on gasoline, alcohol, and cigarettes)
  • Property Taxes
  • Licenses and Other Fees
  • Corporate Income Taxes
  • Individual Income Taxes converts the Tax Foundation data into this helpful graphic [click on graph to enlarge]:

State Tax Sources

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Tracked on Oct 15, 2009 6:23:15 AM


And while this tells percentages, percentages of how much? Some states get by on a lot less than others.

Posted by: Kim | Oct 18, 2009 8:05:33 PM

Where are the things like lottery revenues?

Posted by: Gordie | Oct 15, 2009 12:51:20 PM

NH - A 5% tax is assessed on interest and dividend income

Posted by: Fred | Oct 15, 2009 10:51:00 AM

The chart is incorrect. It shows New Hampshire as receiving revenue from individual income taxes. We have no income tax in New Hampshire.

Posted by: GmanZ | Oct 15, 2009 9:19:52 AM

It's always helpful when looking at these numbers to understand that state revenues also include a HUGE chunk of change from the feds which is almost entirely funded by a highly progressive income tax.

In the case of Tennessee state appropriations from various taxes come to ~ $13.8B for fiscal 2008-2009 so if sales taxes represent ~ $7.3B this number is dwarfed by the $9.6B Tennessee gets in the form of our highly progressive federal tax.

The reason for bringing this up is that state income tax proponents like to say taxes in Tennessee are unfair because they depend largely on a 'regressive' sales tax; but in truth the pot is filled, more so, with revenue from very highly progressive income taxes and to exclude this is to present only the facts of convenience to the argument.

Posted by: JimmyNashville | Oct 15, 2009 9:05:44 AM

It would be interesting if you could relate this information to a few political and economic indicators: traditional Red/Blue voting pattern, current unemployment, job growth over the last X years etc, with the goal being to get an idea of the economic impact of different tax policies (which may or may not be driven by red/blue ideology).

Posted by: James B | Oct 15, 2009 8:48:38 AM

this pretty much deflates the argument in CA that Prop 13 is killing the state. According to this analysis the spread of revenue sources for CA is remarkably well balanced.

Posted by: jeff nolan | Oct 15, 2009 8:38:01 AM

I'd like to see this graph where it shows the real tax rate in each state. For instance, say Oregon has a real tax rate of 30%, while say DC has a real tax rate of 12% - Oregon's line would be much longer - but still show the same data along that line. That'd be interesting.

Posted by: lorien1973 | Oct 15, 2009 8:35:10 AM

Where are the federal funds that are passed back to the state and local governments in earmarks, grants (specific and block), etc? That must be a big component of their "revenue". Or are these "off-budget"?

Posted by: geokstr | Oct 15, 2009 8:27:14 AM

Some truly excellent, fact-filled, thoughtful posts recently. On a roll...

Posted by: Jim,MtnViewCA,USA | Oct 15, 2009 8:01:24 AM

But where does it go? How much to salaries? How much to pensions and other retirement benefits? I bet the latter is the next major crisis.

Posted by: EconRon | Oct 15, 2009 7:18:09 AM

thank you for this information.

Posted by: Jim | Oct 15, 2009 7:15:10 AM