state revenue
Uploaded by roshanbhakta on Nov 21, 2004
State Revenue
There are many different types of revenues that are available to a state. Some revenues can be regressive, progressive, and proportional taxes. A regressive tax puts a large burden on lower income citizens then the higher income citizens because it just adds up to more proportion of low income citizens of their earned income. A progressive tax is a tax that goes up as a citizen’s income goes up. This is more favorable taxes to low income and not high income citizens. A proportional tax or also called a flat tax is a tax that is the same amount for all incomes.
The terms elasticity and yield are important to have knowledge for before understanding any taxes that brings in state revenue. Yield is a term that means taxes being evaluated on how much money they contribute to government coffers. Elasticity means as government expenditures changes the taxing for revenues should contract or expand.
Taxes are a word that should come into mind when talking about revenue for states. There are many major taxes that bring in revenue for states. An example of such tax is property tax. States can account for only 2 percent of total revenue that comes from property taxes. To make property taxing fair, 35 states have enacted the circuit breaker. These circuit breakers make property taxing more equitable. The poor and elderly people receive an applied limit on how much property tax they have to pay.
Income tax is another tax that states use for revenue. Personal income tax accounts for about 34 percent of states total revenue. Corporate taxes account for about 6.5 percent of all state revenue. There are some states that leave out income taxes. These states are Alaska, South Dakota, Florida, Texas, Nevada, Washington, and Wyoming. Income taxes are beneficial when it comes to the criteria of yield and elasticity. These taxes bring in enormous amounts of money in because it taps all sources of income and also these taxes are good in short term economic conditions.
Sales tax is another tax that states use for revenue. It accounts for about 33 percent of the states revenue. There are five states that don’t levy a sales tax and these states are Alaska, Delaware, Montana, New Hampshire and Oregon. The sales tax is favored by states and citizens. It is the one that the two pick if they had to increase a...