Taxes

Key Findings Forty-five states and the District of Columbia collect statewide sales taxes. Local sales taxes are collected in 38 states. In some cases, they can rival or even exceed state rates. The five states with the highest average combined state and local sales tax rates are Louisiana (9.55 percent), Tennessee (9.547 percent), Arkansas (9.48

Most countries’ personal income taxes have a progressive structure, meaning that the tax rate paid by individuals increases as they earn higher wages. The highest income tax rate individuals pay differs significantly across European OECD countries—as shown in today’s map. The top statutory personal income tax rate applies to the share of income that falls

Earlier this month, JAMA Internal Medicine published a study about the impact of banning flavored tobacco products in Massachusetts. The study found, not surprisingly, that the sale of flavored tobacco decreased following the ban. By comparing sales in Massachusetts with sales across 27 other states, the authors observed that sales had decreased more in Massachusetts

Amid record surpluses, Michigan lawmakers are looking to give relief to taxpayers and enhance the state’s competitive standing. Senate Bill 786, which recently reported from committee, would reduce both the corporate and individual income tax rates to 3.9 percent as of January 1, 2022. It would also create a tax credit of $500 for each

The economic harms of the gross receipts tax (GRT) were well understood by the early 20th century. Not only is the tax inequitable, but it is also inefficient and distortionary. That is why most states abandoned GRTs in the early 1900s, as states developed the capacity to administer less harmful taxes. Unfortunately, some policymakers in

Developed countries raise tax revenue through a mix of individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes. The mix of tax policies can influence how distortionary or neutral a tax system is. Taxes on income can create more economic harm than taxes on consumption and property.

Since 2018, 30 states and the District and Columbia have legalized and imposed taxes on sports betting. States that have yet to legalize, but which may do so, should pay attention to the impact of tax design in states that already have legal and taxed sports betting—specifically tax base design. Most recently, online sports betting went live

Policy and economic differences among OECD countries have created variances in how they raise tax revenue, with the United States deviating substantially from the OECD average on some sources of revenue. Different taxes create different economic impacts, so policymakers should always consider how tax revenue is raised and not just how much is raised. This

Alabama lawmakers are acting to ensure that federal relief from the American Rescue Plan Act (ARPA) does not increase tax liabilities in the state. Senate Bill 152, which addresses the issue, recently passed and has been referred to the Ways and Means Committee. This unusual issue is a consequence of Alabama offering a state-level deduction

Table of Contents Key Findings Individual income taxes are a major source of state government revenue, accounting for 36 percent of state tax collections in fiscal year 2020, the latest year for which data are available. Forty-two states levy individual income taxes. Forty-one tax wage and salary income, while one state—New Hampshire—exclusively taxes dividend and

A group of lawmakers in Ohio have proposed to repeal the state’s gross receipt tax (GRT), also known as the commercial activity tax (CAT). House Bill 234 would phase out the tax over five years. Ohio’s CAT, implemented in 2005 as part of tax reform that lowered and consolidated business taxes, is one of only a

Raising kids is expensive. Thankfully, becoming a parent comes with some valuable tax breaks — most notably, the Child Tax Credit (CTC). What is the Child Tax Credit? The CTC is a tax credit for parents of dependent children designed to help offset the cost of raising kids. For tax year 2021, the CTC is