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
Without an income tax, a state is forced to raise its revenues in other ways. This may include sales tax, property tax, or other forms of taxation.
Moreover, some states do not spend as much. Here in Tennessee, our roads and schools and some other public services suffer from underfunding.
A third way of paying for State services is being a net recipient of federal tax dollars. Some states take more money from the federal government than their residents collectively pay out.
On the whole, not having an income tax merely means that the burden of paying of services needs to be shifted elsewhere to other taxes or other jurisdictions.
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