Executive Summary
As state tax rates continue to climb in 1990, so do 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. collections. State tax revenues jumped nearly $20 billion in fiscal year 1989, a 7.5 percent increase over the previous year’s take. Their total was a record high $284 billion, compared to fiscal year 1988’s level of $264.1 billion. Rate hikes on sales, gasoline, and corporate and personal income have contributed to new revenue ighs for the last several years.
In FY ’89 general sales taxes produced more revenue for the states than any other single source. They provided 32.9 percent of total collections, or $93 .4 billion, up 7.3 percent from last year.
Collections from personal and corporate income taxes gathered in the next largest loads of revenue, totaling $112.6 billion, nearly 40 percent of total collections. The personal income tax component of this haul showed a prodigious increase of 10.7 percent and garnered almost as much revenue as general sales, $88.7 billion. This 10.7 percent increase was the largest of all state revenue sources, and it brought in a whopping $8.6 billion more than was collected in FY’88. Rising almost as quickly are corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. collections. These increased 10.4 percent over FY ’88, finishing third to general sales and personal income tax on the list of states’ favorite revenue sources.
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