Thirty states have enacted 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. increases that will raise a total of $17 billion in new revenue in FY 1992, making FY’91 the biggest revenue-raising year in history at the state level. In addition to hiking tax rates, states increased taxes indirectly by broadening taxable bases, extending temporary hikes, and conforming to federal tax rates. They also enacted a host of “non-tax” revenue-raising measures, such as higher fees and accelerated collections that will bring in approximately $2.4 billion more in FY’ 92 revenue.
Gasoline and tobacco were the most popular targets as 23 states hiked the amounts they collect at the pump and 14 states raised their cigarette excises. The bulk of the new revenue will not come from higher excise rates, however, but rather from higher 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. es in six states, and higher personal income taxes in eight states.Share