Florida

Gas tax revenues are on an unsustainable course. Over the last five years, Congress has transferred more than $53 billion from the general fund to the transportation fund in order to compensate for lagging gas tax revenues. By 2015, the transportation fund will be insolvent unless an additional $15 billion transfer is made. Larger transfers will be needed in subsequent years.

Annual state and local finance data from the Census Bureau are often used to rank states as "low" or "high" tax states based on taxes collected as a share of state personal income. But focusing on a state's overall tax revenues overlooks the fact that taxpayers experience tax systems very differently. In particular, the poorest 20 percent of taxpayers pay a greater share of their income in state and local taxes than any other income group in all but 10 states (including DC). And, in every state, low- income taxpayers pay more as a share of income than the wealthiest…

New Census Bureau data released this month show that the share of Americans living in poverty remains high, despite other signs of economic recovery. The national 2012 poverty rate of 15 percent is essentially unchanged since 2010 , but still 2.5 percentage points higher than pre-recession levels. This means that in 2012, 46.5 million, or about 1 in 6 Americans, lived in poverty.1 The poverty rate in most states also held steady with five states experiencing an increase in either the number or share of residents living in poverty while only two states saw a decline.2

New data from the Census Bureau appear to lend support to Florida's reputation as a "low tax state," ranking it 45th nationally in taxes collected as a share of personal income.1 But focusing on the state's overall tax revenues has led many observers to overlook the fact that different taxpayers experience Florida's tax system very differently. In particular, the poorest 20 percent of Florida residents pay significantly more of their income (13.2 percent) in state and local taxes than any other group in the state. For low-income families, Florida is far from being a low tax state.2 In fact, only…

State and local tax codes include a huge array of special tax breaks designed to accomplish almost every goal imaginable: from encouraging homeownership and scientific research, to building radioactive fallout shelters and caring for "exceptional" trees. Despite being embedded in the tax code, these programs are typically enacted with tax policy issues like fairness, efficiency, and sustainability only as secondary considerations. Accordingly, these programs have long been called "tax expenditures." They are essentially government spending programs that happen to be housed in the tax code for ease of administration, political expedience, or both.

Sales taxes are an important revenue source, comprising close to half of all state revenues in 2012. But sales taxes are also inherently regressive because the lower a family's income, the more of its income the family must spend on things subject to the tax.