How do some states (TN, FL, etc) get by with having no income tax? Why can’t every state get rid of it?
In: Economics
A state that doesn’t impose a sales tax simply gets the money elsewhere. That typically means taxing something else at a relatively high rate, or charging fees for things that are perhaps covered by taxes elsewhere. For example, NH has no income tax (though they do tax interest and dividends), but they have the 4th highest property tax rate in the USA. The state also has a monopoly on liquor sales (you have to buy from a state run store).
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