While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
The federal tax code remains a major source of frustration and controversy for Americans, and a hindrance to economic growth and opportunity. Other countries, such as Estonia, have proven that sufficient tax revenue can be collected in a less frustrating and more efficient way.
While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
States are unprepared for the ongoing shift to remote and flexible work arrangements, or for the industries and activities of today, to say nothing of tomorrow. In some states, moreover, existing tax provisions exacerbate the impact of high inflation and contribute to the supply chain crisis.
A landmark comparison of corporate tax costs in all 50 states, Location Matters provides a comprehensive calculation of real-world tax burdens, going beyond headline rates to demonstrate how tax codes impact businesses and offering policymakers a road map to improvement.
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The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.
As Oktoberfest celebrations kick off around the world, let’s look at how much tax European Union (EU) countries add to the world’s favorite alcoholic beverage.
Any move to repeal the cap or enhance the deduction would disproportionately benefit higher earners, making the tax code more regressive.
Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
In recent years, several countries have taken measures to reduce carbon emissions, including instituting environmental regulations, emissions trading systems, and carbon taxes. In 1990, Finland was the world’s first country to introduce a carbon tax.
If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
Carryover tax provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
In tax year 2020, taxpayers claimed more than 159 million tax credits on their individual income tax returns worth a total of more than $277 billion. That was an increase of $35.3 billion from tax year 2019, largely due to an influx of pandemic relief administered through the tax code in 2020.
California pumps out the highest state gas tax rate of 77.9 cents per gallon (cpg), followed by Illinois (66.5 cpg) and Pennsylvania (62.2 cpg).
The aim of patent boxes is generally to encourage and attract local research and development (R&D) and to incentivize businesses to locate IP in the country. However, patent boxes can introduce another level of complexity to a tax system, and some recent research questions whether patent boxes are actually effective in driving innovation.
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
Capital allowances play an important role in a country’s corporate tax base and can impact investment decisions—with far-reaching economic consequences.
Compare the latest 2023 sales tax rates as of July 1st. Sales tax rate differentials can induce consumers to shop across borders or buy products online.
As the EU pursues massive changes in public policy as part of its green transition, expect fuel taxes to be central to any policy discussions.
Reviewing reported income helps to understand the composition of the federal government’s revenue base and how Americans earn their taxable income. The individual income tax, the federal government’s largest source of revenue, is largely a tax on labor.
Taxes are the single most expensive ingredient in beer, costing more than the labor and raw materials combined.
It’s unlikely these implemented and proposed windfall taxes will achieve their goals of raising additional revenues without distorting the market. Instead, they would penalize domestic production and punitively target certain industries without a sound tax base.
Of all alcoholic beverages subject to taxation, stiff drinks—and all distilled spirits—face the stiffest tax rates. Like many excise taxes, the treatment of distilled spirits varies widely across the states.
In most European OECD countries, corporate income is taxed twice, once at the entity level and once at the shareholder level.
States are in a better position to attract business investment when they maintain competitive real property tax rates and avoid harmful taxes on tangible personal property, intangible property, wealth, and asset transfers.