Poll Results: How Should Your State Generate Revenue?

Eenie, Meeney, Miney, Mo

Where does your state get the money to fund its budget? Where should it get the money to fund its budget?

Between sales, income and property tax (or a mix) we wanted to know where you thought your state should get the paper it needs to balance the books. So we asked and you answered!

47 people participated in our online poll (and Jim Wilson won the $50 dollar gift card participation giveaway–congrats Jim!). But the poll sparked more than just numbers. We had such quality responses from accounting experts and found such good data on state revenue that we’ve got the following for you:

  • The complete results of the poll.
  • Views from accounting experts.
  • A link to an interactive map that shows what percentages of revenue for each state came from property, sales and income.

Poll Results

Apparently sales tax is the new black. 15 of the 47 voters indicated that they would prefer their state to generate revenue with sales tax alone, while 14 people voted for a mix of all three taxes. Last place? One person voted for a mix of property and income tax with no sales tax. Check out the chart for the full results of how our voters want their states to generate revenue.

In contrast to the sample of people who voted in the poll, accounting professionals who joined in the discussions favored a mix of all three taxes. Here’s a sample of perspectives from people who make it their job to understand taxes.

What Accounting Professionals Said

I view the “sales, property and income tax” to be the most equitable, even though many folks voted for the “100% sales tax.” As you know, sales tax is a regressive tax – and from an equity standpoint, I can’t see how a pure sales tax could replace all other taxes. But for states that are contemplating increasing or revising their tax structure, any changes need to include provisions that require state governments control spending.
- Sylvia F. Dion MPA, CPA, Owner Sylvia Dion CPA – State & Local Tax Consulting, http://www.thestateandlocaltaxbuzz.com/

Traditionally sales taxes have been viewed as the least fair on lower income families – taxes on essential goods and services tend to impact them more disproportionately than families with more discretionary income. 
-D’Anne McNaughton, CPA, http://www.texsalestax.com/

 

It’s not the types of tax that seem unfair…It’s that there is no uniformity between states.  You have nexus in a state and yet that state calculates the amount of tax due based on different apportionment factors than in another state.  Different goods and services are subject to, or not subject to, sales tax depending on the state.    Fair, not really.  Good for Tax Planning, Absolutely.
-Jody Padar CPA, MST, CEO & Principal New Vision CPA Group, https://www.newvisioncpagroup.com/

Interactive Map

Finally, we took data from a U.S. Census Bureau report that details where states got their revenue in 2011 and turned it into a fully interactive map. Click the picture below and explore what percentages of each state’s revenue came from income, sales and property tax (give it a second to load).*  Just mouse over each state to see the break down. Select different views from the options at the top left of the screen.

*Note: the data only reflects state revenue. A state may collect certain taxes, such as property tax, for a local government, in which case, those collections are not reflected here.

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