January 16, 2007

John Mikesell: States Should Avoid Antiquated Gross Receipts Taxes

Gross receipts taxes are a relic of the past, and state legislators looking to reform their tax systems should avoid them, according to John Mikesell, Professor of Public Finance and Policy Analysis at Indiana University,

“These are taxes that get hidden,” he said. “They’re reported as being taxes on business, but we all know that they’re going to end up most likely as taxes embedded in prices that consumers pay.”

Mikesell discussed the drawbacks of gross receipts taxes in the most recent Tax Policy Podcast. He explained that their lack of transparency and overly broad bases damage businesses and hide the true size of the tax burden from consumers.

Click here to listen to the podcast.