State governments raise revenue from a variety of sources, with most revenue coming from personal income taxes and general sales taxes.
According to the Pew Charitable Trust’s “How States Raise Their Tax Dollars” personal income taxes are the greatest source of tax dollars in 28 of the 41 states that impose them. General sales taxes are the largest source in 17 of the 45 states that collect them. States that rely heavily on sales taxes, like Texas (62% of revenue) and Florida (59%) generally results in overall tax collection systems that are more regressive meaning lower income familes pay a larger share of their income in taxes than do those at the top of the income distribution. This visualization shows the source of each state’s tax revenue. Select a state to highlight and compare to other states or the 50 state average.
For example, Hawaii raises 30.6% of its revenue from general income taxes, a bit lower share than the 37.2% for all 50 states combined. In contrast, Hawaii’s General excise tax contributes 46.3% of state revenues vs 31.6% for general sales taxes for all states combined. While the property tax does appear in this visualization, most states do not levy significant taxes on personal or business property. When including taxes levied by counties in each state, using data for 2015, the Institute on Taxation and Economic Policy’s 5th Edition of “Who Pays” finds that Hawaii’s ranks 2nd among all 50 states in the share of family income going to taxes for families in the bottom 20% of the income distribution. To hear about other features of Hawaii’s tax system, comparisons with other states and ideas for reform, join us for a tax conference this Thursday, November 2: