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1 Arthur P. Hall, State Tax Rates and 1995 Collections 1 (1996)

handle is hein.taxfoundation/srgexz0001 and id is 1 raw text is: October 1996, No. 64 STax 1 ....l+~ett) 1 State tax and fee collections grew by 6.7 percent between 199i and 1995. The growth in i nflation-adjustcd tax collections continues a trend that began more than a decade ago. (Piginre I charts the growth over the past decade.) table 5 reports that the three fastest growing categories of state collections were corporate income taxes (141 percent), property taxes (11.4 percent), and tobacco taxes (11.2 Figure 1 Total State lax Collections, 1985-1995 (Billions of Dollars, Current and Constant 1985$) $450.0 $400.0 $350.0 $300.0 2 $250.0 0 i $200.0 $150.0 $100.0 $50.0 $0.0 J Current Dollars 0 Constant 1985$ LX (0 r- 0) 0) 0 C\j CO ;t O 00 ) 00c c) 0 0 () 0) ) 0) 0) 0Y) 0) 0) 0M 0) 03) 0) 0) 0) 03) 0Y) 0) ourcc: Tax tOtll/ddil(l. percent). Total 1995 state-by-state collections, along with the distribution by type of tax, are reported in Table 6. On average, economic growth in 1995 accounte( for almost all of the growth in state collections. Table 7 reports that, for the nation, state collections grew 0.26 percent faster than personal income. That growth rate compares with an inflation- adjusted decade-long average of 0.22 percent. However, the growth rate of state tax collections relative to personal income growth varies substantially from state to state. From 1994 to 1995, the live states that had the highest tax growth relative to personal income growth were Alaska, Missouri, Michigan, North l)akota, and Connecticut. The five states that had the highest personal income growth relative to tax growth were Wyoming, New Mexico, Vermont, H-awaii, and New Jersey. The growth of taxes relative to income does not necessarily correlate with the overall tax burden in a state. For example, in 1995, Alaska had the highest tax burden per $ 1,000 of personal income and it recorded the fastest tax growth between 1994 and 1995, as Tables 4 and 7 report. Yet, over the prior 10 years, Alaska had the slowest tax growth. These anomalies arise because Alaska enjoys enormots tax inflow from oil procluction, making it a unique case. New Mexico ranked third among the states in terms of taxes per $ 1,000 of personal income, but it recorded the second slowest tax growth. (If Washington, 1).C., were a state, it would have the highest ranking tax burden.) faible 4 also shows that various measurements of the tax burden can differ substantially. For example, Mississippi and New Jersey show an almost equally large disparity between their per-capita and per- B i Arthit- P. llall, P5.l) senior Icoiionijt ,I~x I'Oindation

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