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How come some U.S. states don't have income taxes while other states do? That's not fair Currently 7 states / 40% of American's do not pay income taxes.
States with NO income taxes in Red.
States that tax only interest & dividend income in Yellow.
I have heard that TN doesn't have state income tax because of their higher sales tax and food tax. This way they get vacationers as well as residents to pay, thus they can do w/o state income tax.
How come some U.S. states don't have income taxes while other states do? That's not fair Currently 7 states / 40% of American's do not pay income taxes.
Those 7 states do not equal 40% of the population...it's more like 18%. The population of the U.S. is 307 million, and the population of those 7 states is around 55 million.
I was in a bit of a hurry to write my last post. To expound, Alaska has a "permanent fund" law that allows oil/energy profits to be refunded back to the citizens of the State. It is good for every single member of a family, including infants. The amount varies, and is not guarenteed. However, most years there is a significant cash allotment to every man, woman, and child.
While there is no state income or sales tax, some cities and towns have added "local" taxes, but at last check, Anchorage is not one of them.
One trade-off, prices are generally higher for items that must be imported such as fruit, dairy and other non-natural Alaskan-grown products. Almost anything imported will cost more. Whether or not incomes have kept up is another story, and frankly, I'm not up on that after leaving the State in '98.
Property taxes, again, not sure since I never owned property in AK. Perhaps someone can update my 1990's perceptions...
While it's true that every state has some kind of tax, it is also true that the total tax the average person pays varies from state to state, but that's okay because the people in each state have their own ideas about how much government they want, and what areas they want the government to be involved with. This "no fair" comment in the opening post is what keeps sticking in my craw. Hey, that's why we have a federal system of government. The people of each state make choices about what and how much they want their states' governments to be involved with, and what services and how much they are willing to pay for. This will vary between states, depending on the specific situation and attitudes within a state. That's what the federal system is all about.
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