September 13, 2019
The Center Square
Pennsylvania finished 16th in a new study by the Tax Foundation that ranks how dependent states are on individual income taxes.
State income tax collections in Pennsylvania amount to 26.2 percent of the total state and local levies collected, based on numbers from fiscal-year 2016, the most recent year for which data is available.
Nationwide, the average state reliance on individual income tax revenues is 23.5 percent, according to the Tax Foundation’s analysis. Seven states – Alaska, Florida, South Dakota, Wyoming, Nevada, Texas and Washington – levy no state income taxes, while New Hampshire and Tennessee tax only interest and dividend income, not workers’ wages, the study said.
Income taxes have a more negative effect on economic growth than sales and property taxes, according to the Tax Foundation. That’s because income taxes rely on wages and savings, while consumption taxes fall on consumer spending rather than earnings, the study said.
Which States Depend Most on Income Taxes?
Source: Tax Foundation