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Facts & Figures 2010: How Does Your State Compare?

2 min readBy: Justin Higginbottom

The 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. Foundation has released its 2010 version of Facts and Figures, a pocket- and purse-sized booklet comparing the 50 states on 31 different measures of taxing and spending, including individual and 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. rates, business tax climates, excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. es, tax burdens and state spending. The booklet is edited by Tax Foundation Analyst Justin Higginbottom.

“As states recover from the recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. and legislators attempt to balance budgets and stabilize revenue, it’s important to keep in mind that tax changes affect states’ competitiveness regionally and nationally,” said Tax Foundation President Scott Hodge. “Having accurate and timely information is vital to this discussion, and our annual Facts & Figures handbook provides an indispensable metric.”

States made many significant tax changes in 2009 – enough that the Tax Foundation last summer issued its first-ever mid-year update of Facts & Figures in the annual publication’s history.

California, Connecticut, Delaware, Hawaii, New Jersey, New York, North Carolina, Oregon and Wisconsin increased individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. rates, while Louisiana, Maine, North Dakota, Ohio and Vermont reduced them. States that increased 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 2009 include California, Massachusetts, Minnesota, Nevada and North Carolina, as well as the District of Columbia.

Fourteen states, the District of Columbia and Puerto Rico increased cigarette excise tax rates in 2009, and a number of states increased excise taxes on alcohol.

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.


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