Sales, Gas and Excise Taxes
In a special legislative session starting March 1, the New Mexico Legislature will consider a variety of revenue-raising options to close the state’s budget deficit. Some of the options under consideration—especially those approved by the state Senate earlier this year—would fall much more heavily on low- and middle-income families than on the best-off New Mexicans. […]
Determining the Statewide Sales Tax Rate Under SJR 29 and HJR 56
February 9, 2010 • By ITEP Staff
Senate Joint Resolution 29 and House Joint Resolution 56 are currently being debated in the Missouri Legislature. The proposals would place a constitutional amendment on the ballot to dramatically change the state’s revenue structure by eliminating the individual income and corporate income/franchise taxes and replacing them with a greatly expanded sales tax. The new statewide […]
In evaluating SJR 29, policymakers should have a clear understanding of how broad the tax base could actually be under such a plan, what the tax rate would actually have to be in order to make the plan revenue-neutral overall, and how the plan overall would affect Missourians at different income levels. My testimony presents […]
Earlier this week, the Missouri Senate Ways and Means Committee held a hearing on House Joint Resolution 36, which would eliminate the state’s individual and corporate income taxes while increasing the state’s sales tax rate and applying the sales tax to all consumer spending. The bill would also introduce a sales tax rebate to offset […]
My testimony today focuses on the sales tax legislation included in the Tax Reform Act of 2007. In particular, my testimony will discuss the impact of the bill’s expansion of the sales tax base to include more services. The proposed changes are an important first step toward a more sustainable Maryland tax system. But, because […]
In recent months, lawmakers in a number of states have suggested that a particular type of sales tax, called the value-added tax or VAT, might be a cure-all for state budgetary problems. Although Michigan is the only state that currently relies on a VAT as a major revenue source, several other states have recently considered implementing this type of tax. This policy brief evaluates the case for (and against) implementing a VAT at the state level.
Sales, excise, and gas taxes are an important source of revenue for states. The sales tax, in fact accounts for half of all state tax revenue. Forty-five states levy broad-based sales taxes, every state levies at least some type of tax on consumption, and all states have a tax on gasoline. But these taxes aren’t without problems.
Sales taxes are inherently regressive—requiring lower- and middle-income taxpayers to spend a larger share of their household budgets in tax than their wealthier neighbors. The gas tax provides funding for infrastructure, but many states have not modernized their gas tax, meaning it no longer raises adequate revenue. ITEP resources on sales, excise and gas taxes provide general and state-specific information about the mechanics of these taxes and options for reform.
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