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
It’s no different than your personal finances or company finances. You have a certain amount of money that needs to be coming in. You may have multiple streams of money coming in. If you don’t have enough coming in on one stream, you increase the flow on another.
In the case of states, the could have income taxes, sales taxes, property taxes, sin taxes (tobacco, alcohol, etc.), entertainment taxes, tourist taxes, etc. Some states like Florida make a ton of money on tourism. So they can go without an income tax. Delaware makes a bunch of money on corporations. So they don’t have sales tax.
At the end of the day, the state will get the money they want. If it doesn’t come in as income tax, you can bet it’s coming in somewhere else.
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