In states that don’t collect state income tax, how do they make up for the lost revenue?
16.January, 2010
Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming don’t have income tax. So how do they make up for the revenue they would have generated?
Alaska has the kickbacks from the oil industry through the Permanent Investment Fund. Part of the profits are distributed to Alaskans every year, so Alaska has a sort of a negative tax based purely upon head count. (This is probably the best example of pure Socialism in the US today. Go figure, listening to Sarah Palin’s rants about Socialism!)
Florida and Nevada depend upon tourism dollars. They also have sales and property taxes that are on the high side.
The others have high sales taxes and typically have very high property taxes. TX property taxes can easily run as high as 5% of FMV every year in and around the major cities. TX used to make a lot of money from the oil industry but that market collapsed in the mid 1980s and has never fully recovered. Property tax rates have sky-rocked in TX since then.
Don’t forget TN and NH. Both have high property taxes. NH property taxes are even higher than TX property taxes. NH also makes money by selling alcoholic beverages in state-owned stores. (Another example of Socialism, by the way.)
16.January, 2010 um 11:57 am
Alaska has the kickbacks from the oil industry through the Permanent Investment Fund. Part of the profits are distributed to Alaskans every year, so Alaska has a sort of a negative tax based purely upon head count. (This is probably the best example of pure Socialism in the US today. Go figure, listening to Sarah Palin’s rants about Socialism!)
Florida and Nevada depend upon tourism dollars. They also have sales and property taxes that are on the high side.
The others have high sales taxes and typically have very high property taxes. TX property taxes can easily run as high as 5% of FMV every year in and around the major cities. TX used to make a lot of money from the oil industry but that market collapsed in the mid 1980s and has never fully recovered. Property tax rates have sky-rocked in TX since then.
Don’t forget TN and NH. Both have high property taxes. NH property taxes are even higher than TX property taxes. NH also makes money by selling alcoholic beverages in state-owned stores. (Another example of Socialism, by the way.)
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16.January, 2010 um 12:38 pm
Sales taxes…
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16.January, 2010 um 1:14 pm
They make it up through other taxes.
Alaska and Texas have traditionally used taxes on oil for the most part. Alaska has in the past actually paid its residents money.
Nevada and Florida have gambling and tourism taxes; and their sales tax is a little high too.
As for the rest; I would bet on a high sales tax rate.
I like the income tax because it tries to put the heavier burden on those that can most afford it. Taxes like sales tax puts the same percentages on everyone.
A person with over 2 million of taxable income can afford to pay a much higher percentage than a person with only 2 thousand of taxable income. The 2 million dollar guy is buying a lot of toys whereas the poor guy at 2 thousand is struggling just to meet the basics.
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I’m an Enrolled Agent (EA) with 20 years experience.
16.January, 2010 um 1:52 pm
With other taxes. Residents are going to pay for state government one way or the other.
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