Today's Monday Map focuses on the deduction of state and local income or sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es from federal taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. . New York State benefits the most from this deduction – its residents deducted an average of 6.16% of their income in state taxes. Alaska benefits least, having neither an income tax nor a statewide sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. ; the small average of 0.26% most likely comes from local sales taxes.
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