In his upcoming budget, President Obama will propose adjusting the Cadillac Tax to account for geographic variations in health costs, according to an article published on Wednesday by two White House economists. The...
- The Tax Policy Blog
- New Report: Sources of State Tax Revenue
New Report: Sources of State Tax Revenue
- Property taxes make up the largest portion of combined state and local government tax revenue at 35%, with sales and gross receipts taxes close behind at 34%.
- The corporate income tax brings in the smallest amount of any major tax, providing only about 3% of the tax revenues taken in by state and local tax collectors.
- States vary widely on how heavily they rely on the various tax categories. New Hampshire receives almost 65% of its total state and local tax revenue from property taxes, while Arkansas receives less than a fifth of its tax revenues from the same source. (View the report for a table containing each state's sources.)
- The composition of all state and local revenue has also shifted significantly over time. A century ago, property taxes provided over 80% of all state and local government tax revenues, while in recent decades that proportion has fallen to around a third of total tax receipts. The corporate income tax rose from nonexistent in 1913 to raising 6% of state and local tax revenue in 1980, only to fall back to 3.4% in fiscal year 2010.
- The data, taken from U.S. Census figures for 2010, looks just at state and local tax revenue ($1.269 trillion). It does not include $608 billion in non-tax revenues (interest and user fees including tolls and tuition), $623 billion in federal aid, and $669 billion in enterprise revenues (primarily pension funds but also liquor store revenue). A future report will cover these topics.
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The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.