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1 Arthur P. Hall, State Tax Rates and 1994 Collections 1 (1995)

handle is hein.taxfoundation/srfaxz0001 and id is 1 raw text is: TAX r, MM
June 1995
Number 50

State Tax Rates and 1994 Collections

/0' ,4thur P. Hall, Pb).D.  State tax and fcc collections grew by 8 3  collections. 1tble I reports that, for the
Senior Iconomnist        percent betwccn 1993 and 1994. '['he growth  nation, state collections grew 0.88 percent
lax Fo judtioji          in inflation-adjusted tax collections continues  aster than personal income. '[hat growth
a trend that began more than a decade ago.  rate compares with an inflation-adjusted
(fgure / charts the growth over the past   decade-long average of 17 1 percent.
decade.) Jable 5 reports that the three fastest  lowevr, the growth rate of state tax
growing categories of state collections were  collections relative to personal income growth
license fees (33.1 percent), property taxes  varies substantially from state to state, From
(10.6 percent), and corporate income taxes   1993 to 1994, the livc states that had the
(9.9 percent). Total 1994 state-by-state    highest tax growth relative to personal
collections, along with the distribution by type  income growth were New Hampshire, South
of tax, are reported in lable 6.            Dakota, l)elaware, Utah, and Mississippi. The
On averagc, economic growth in 1994     five states that had the highest personal income
accounted for almost atll ol the growth in state  growth relative to tax growth were Alaska,
Rhode Island, Louisiana, Pennsylvania,
Figure I                                                              and Vermont.
Figure 1The grow th of taxes relative to income
To)tal State Gotvernment 7Tx Collections, Fiscal Years 198-4- 1994     Tegot       ttxsrltv      oicm
does not necessarily correlate with the overall
$400                                                              tax burden in a state. Table 4 shows that New
lampshire has the second lowest tax burden
per $ 1,000 of personal income despite the fact
$350      Cr                                                      that it recorded the fastest tax growth between
Constant .... 8r4do.11                                 1993 and 1994. Alaska showed the slowest tax
$300                                                              growth but has the highest state tax burden.
However, Alaska, because of its large tax
collections from oil production, is a unique
case. (I Washington, ).C. were a state, it
o                                                                    would have the highest ranking tax burden.)
6  $200                                                                  Table 4 also shows that various
tmcasurements of the tax burden can differ
$150                                                              substantially, For example, both Mississippi
and New jersey show an equally large disparity
between their per-capita and per-$1,000-of-per-
$100                                                              sonal-ineome rankings. But the opposite
direction of the disparities can be explained by
$50                                                              the per capita income levels of the two states.
Mississippi is ranked 36th in terms of tax
burden per capita, but is ranked 8th in terms
$0 .of tax burden per $ 1,000 of personal income.
00 0   o 0     0    0    0)   a)  0)   0)    a
2     go                        2 Mz   ,New Jersey is ranked 10th in per capita tax
Source: Tix Fouindation.                                             burden, but 38th in terms of tax burden per
$1,000 of personal income.

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