State and Local Tax Burdens Hit 25-Year High

[Roland99]

PDF
http://www.taxfoundation.org/files/sr153.pdf

Introduction

State and local taxes will consume a recordsetting 11 percent of the nation’s income in 2007. Since 1986, the state-local tax burden had never fallen below 10 percent or risen above 10.9 percent. Figure 1 charts the course of the nation’s state-local tax burden since 1982.

This estimate of state-local tax burdens at an all-time high comes at a time when personal and corporate incomes have risen for almost four consecutive years, sometimes at a remarkable pace. Along with low unemployment, these rising incomes have boosted tax collections substantially and helped most states meet their revenue expectations with ease since 2004.

...

However, even as the economy has thrived and progressive income taxes have increased the tax burden, some states have accelerated the trend by enacting new or higher state-level tax rates. Meanwhile, other states have taken advantage of the good economy by cutting tax rates or allowing temporary tax hikes to expire.

Property tax collections have risen significantly for several years, as local government officials apparently did not ratchet down rates enough to prevent a surge of revenue as the value of real estate soared between 2001 and 2006.

I know there are many municipalities that have hit legislative maximums on property tax rates as their budgets were meeting shortfalls due to lack of Federal funds for Federally-mandated programs.

[no_hypocrisy]

1. Federal tax breaks and budgetary cuts still mean that the money

has to come from another source. Trickle down taxation.