This month marked the 5th edition release of the Institute on Taxation & Economic Policy’s (ITEP) Who Pays? A Distributional Analysis of the Tax Systems in All Fifty States. The report looks at states' reliance on sales tax for revenue, whether states have personal income taxs and the number of tax brackets states have. The following table shows ITEP’s most and least regressive state tax systems. Among the states labeled as most regressive, Washington, Florida, Texas, South Dakota and Tennessee lack a broad-based income tax. Conversely, the seven states listed as having the least regressive systems have some combination of no or low sales taxes, progressive income tax structures and refundable earned income tax credits (a tax credit for the poor).
ITEP's Most and Least Regressive State & Local Tax Systems
|Florida||District of Columbia|
An analysis released March 24 by the Federal Funds Information for States warns that fairness is but one feature of a good tax system. Others are adequacy, simplicity, transparency and ease of administration. “Sometimes the policies that satisfy one feature run contrary to another, making it important that a system be evaluated in its entirety rather than in a piecemeal fashion,” FFIS says. “This limits the usefulness of ITEP’s analysis, since only one of the five attributes is evaluated.” For example, Washington puts more of its revenues toward programs that support low-income families.
Everything’s expensive in California
This past winter, I dined out at a Northern California restaurant with a menu that contained this notice at the top: “Water is precious. Please help us conserve it.” The restaurant, and this was no cheap place, was letting its patrons know that water was available upon request – but we’d have to ask for it if we really wanted some. Notices like this one might become normal following this month’s move by the California State Water Resources Control Board to adopt additional water use restrictions for residents and urban water suppliers. An analysis this week by Moody’s Investors Service predicted the restrictions will give water utilities the political leverage they need to raise water rates.
If you hold water bonds, this is good news. A rate increase will help maintain the credit quality of those bonds which have so far not faltered in three years of drought. Moody’s says that water sales have remained strong in recent years despite the historic drought. If you are a California resident, well, you’ll probably just be stuck paying more money for less water.
Who let the dogs out?
Philadelphia’s controller said the city is woefully inadequate at ensuring the city’s dogs are licensed – a failure estimated costs as much as $5 million annually in lost revenue. Controller Alan Butkovitz released a report this week, noting that the current fiscal year’s license fee collections indicate that less than five percent, or as few as 12,000, dog owners are in compliance with city code requiring all dogs to have a license. Using the American Veterinary Medical Association’s Pet Ownership Calculator Butkovitz estimates there are almost 350,000 dogs in Philadelphia. Under the license fee of $16 for altered dogs, full compliancy could generate $5.6 million annually. Through the first eight months of FY 2015, the city collected $191,756, well below the more than $1 million the city budgeted for this year. Read the controller’s full revenue report here.