Thursday, September 05, 2013

Taxes on Sales Up : Add Local Taxes To

Just mention to a local or national politicians that you think we have to have a total revamping of  our tax system and watch them list a dozen reason why you are right, but when they move on the say to themselves, what an idiot. What would we do without more taxes?

Taxation Across the United States in 2013
 Source: Scott Drenkard, "State and Local Sales Tax Rates Midyear 2013," Tax Foundation, August 28, 2013
September 5, 2013

Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt, says Scott Drenkard of the Tax Foundation.
Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states.
The five states with the highest average combined rates are:
  • Tennessee (9.44 percent).
  • Arkansas (9.18 percent).
  • Louisiana (8.89 percent).
  • Washington (8.87 percent).
  • Oklahoma (8.72 percent).
The five states with the lowest average combined rates are:
  • Alaska (1.69 percent).
  • Hawaii (4.35 percent).
  • Maine (5 percent).
  • Wisconsin (5.43 percent).
  • Wyoming (5.50 percent).
California, which raised its sales and income taxes through the initiative process in November 2012, has the highest state-level rate at 7.5 percent. Five states tie for the second-highest statewide rate with 7 percent each: Indiana, Mississippi, New Jersey, Rhode Island and Tennessee.
The five states with the highest average local sales tax rates are Louisiana (4.89 percent), Colorado (4.49 percent), Alabama (4.48 percent), New York (4.48 percent) and Oklahoma (4.22 percent).
Of course, sales taxes are just one part of an overall tax structure and should be considered in context. For example, Washington state has high sales taxes but no income tax; Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers' control that can have immediate impacts.
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