State Revenue: Sales, Property or Income Tax?
- Apr 17, 2012 | Will Frei
Avalara, a SaaS company that automates sales tax compliance, has an online poll where they ask which of these taxes you think your state should use to generate revenue. Vote in their online poll for a chance to win a $50 gift card (to help you pay all those state taxes).
Whenever a state lowers or eliminates one of these three taxes, the others inevitably seem to rise. Case in point: Pennsylvania is currently considering HB 1776, a bill that would eliminate school property tax. The bill proposes to make up the loss in revenue through sales tax. In the words of HB 1776, “Any property tax reform will involve shifting the levy from one type of tax to another. There’s no free ride.”
Shifting from one tax to another can be like a game of hot potato: no one wants the tax burden to fall into the wrong hands. You can certainly hear this in the recent debates over the proposal to eliminate Kansas income tax. For instance, Erica Williams, policy analyst for the Center on Budget and Policy Priorities claims that “If Kansas gets rid of the income tax the state will likely find itself . . . raising other taxes on middle- and low-income families . . . .”
So what about your state? What is the right ratio of sales, income and property tax? Go vote in the poll and get a chance to win a $50 gift card.