Ch. 25: Contrasting Views

Vocabulary:

sales tax, income tax

Opposing Views on Taxes

• The state of Tennessee does not have an income tax.• States with an income tax collect a certain amount of

money from a person’s paycheck to pay for taxes.• Some Tennesseans think that it is time to change

Tennessee’s tax laws to include an income tax so that sales tax could be lowered.

• Others think that an income tax would be worse for the state of Tennessee than the already high sales tax rate.

Opposing Views on Taxes

• On the next few pages are the sales and income tax rates for all 50 states.

1. How many states do not have an income tax?

2. Of these states how many have a sales tax of 6% or higher?

3. What type of tax does Tennessee have?

4. What is an income tax?

5. What is a sales tax?

Sales Tax Rates Across the United States

General Income Tax Rate by StateState Percentage Usual Amount

• Alabama 2.0 - 5.0% $500 - 3,000• Alaska None  • Arizona 2.59 - 4.54% $10,000 - 150,000• Arkansas 1.0 - 7.0% $3,699 - 31,000• California 1.0 - 9.3% $6,827 - 44,815• Colorado 4.63% Flat Rate• Connecticut 3.0 - 5.0% $10,000 - 10,000• Delaware 2.2 - 5.95% $5,000 - 60,000• Florida None  • Georgia 1.0 - 6.0% $750 - 7,000• Hawaii 1.4 - 8.25% $2,400 - 48,000• Idaho 1.6 - 7.8% $1,237 - 62,055• Illinois 3.0% Flat Rate• Indiana 3.4% Flat Rate• Iowa 0.36 –8.98% $1,343 - 60,436

General Income Tax Rate by State (continued)

State Percentage Usual Amount• Kansas 3.5 - 6.45% $15,000 - 30,000• Kentucky 2.0 - 6.0% $3,000 - 75,000• Louisiana 2.0 - 6.0% $12,500 - 25,000• Maine 2.0 - 8.5% $4,849 - 19,450• Maryland 2.0 - 4.75% $1,000 - 500,000• Massachusetts 5.3% Flat Rate• Michigan 4.35% Flat Rate• Minnesota 5.35 - 7.85% $21,800 - 71,591• Mississippi 3.0 - 5.0% $5,000 - 10,000• Missouri 1.5 - 6.0% $1,000 - 9,000• Montana 1.0 - 6.9% $2,500 - 14,900• Nebraska 2.56 - 6.84% $2,400 - 27,001• Nevada None • New Hampshire Dividend and Interest Income Only  • New Jersey 1.4 - 8.97% $20,000 -500,000

General Income Tax Rate by State (continued)

State Percentage Usual Amount• New Mexico 1.7 - 5.3% $5,500 - 16,000• New York 4.0 - 6.85% $8,000 - 500,000• North Carolina 6.0 - 7.75% $12,750 - 60,000• North Dakota 2.1 -5.54% $31,850 - 349,701• Ohio 0.618 - 6.24% $5,000 - 200,000• Oklahoma 0.5 - 5.5% $1,000 - 8,701• Oregon 5.0 - 9.0% $2,900 - 7,300• Pennsylvania 3.07% Flat Rate• Rhode Island 25% of Federal Taxes   • South Carolina 0.0 - 7.0% $2,670 - 13,350• South Dakota None  • Tennessee Dividend and Interest Income Only• Texas None• Utah 5.0% Flat Rate• Vermont 3.6 - 9.5% $32,550 - 357,700

General Income Tax Rate by State (continued)

State Percentage Usual Amount

• Virginia 2.0 - 5.75% $3,000 - 17,000

• Washington None  

• West Virginia 3.0 - 6.5% $10,000 - 60,000

• Wisconsin 4.6 - 6.75% $9,700 - 145,460

• Wyoming None  

• District of Columbia 4.0 - 8.5% $10,000 - 40,000