1. Ch. 25: Contrasting Views Vocabulary: sales tax, income tax

2. 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 persons paycheck to pay for taxes. Some Tennesseans think that it is time to change Tennessees 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.

3. 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?

4. Sales Tax Rates Across the United States

5. General Income Tax Rate by State StatePercentageUsual Amount Alabama 2.0 - 5.0%$500 - 3,000 AlaskaNone Arizona2.59 - 4.54%$10,000 - 150,000 Arkansas1.0 - 7.0%$3,699 - 31,000 California1.0 - 9.3%$6,827 - 44,815 Colorado4.63%Flat Rate Connecticut3.0 - 5.0%$10,000 - 10,000 Delaware2.2 - 5.95%$5,000 - 60,000 FloridaNone Georgia1.0 - 6.0%$750 - 7,000 Hawaii1.4 - 8.25%$2,400 - 48,000 Idaho1.6 - 7.8%$1,237 - 62,055 Illinois3.0%Flat Rate Indiana3.4%Flat Rate Iowa0.36 –8.98%$1,343 - 60,436

6. General Income Tax Rate by State (continued) StatePercentageUsual Amount Kansas3.5 - 6.45%$15,000 - 30,000 Kentucky2.0 - 6.0%$3,000 - 75,000 Louisiana2.0 - 6.0%$12,500 - 25,000 Maine2.0 - 8.5%$4,849 - 19,450 Maryland2.0 - 4.75%$1,000 - 500,000 Massachusetts5.3%Flat Rate Michigan4.35%Flat Rate Minnesota5.35 - 7.85%$21,800 - 71,591 Mississippi3.0 - 5.0%$5,000 - 10,000 Missouri1.5 - 6.0%$1,000 - 9,000 Montana1.0 - 6.9%$2,500 - 14,900 Nebraska2.56 - 6.84%$2,400 - 27,001 NevadaNone New HampshireDividend and Interest Income Only New Jersey1.4 - 8.97%$20,000 -500,000

7. General Income Tax Rate by State (continued) StatePercentageUsual Amount New Mexico1.7 - 5.3%$5,500 - 16,000 New York4.0 - 6.85%$8,000 - 500,000 North Carolina6.0 - 7.75%$12,750 - 60,000 North Dakota2.1 -5.54%$31,850 - 349,701 Ohio0.618 - 6.24%$5,000 - 200,000 Oklahoma0.5 - 5.5%$1,000 - 8,701 Oregon5.0 - 9.0%$2,900 - 7,300 Pennsylvania3.07%Flat Rate Rhode Island25% of Federal Taxes South Carolina0.0 - 7.0%$2,670 - 13,350 South DakotaNone TennesseeDividend and Interest Income Only TexasNone Utah5.0%Flat Rate Vermont3.6 - 9.5%$32,550 - 357,700

8. General Income Tax Rate by State (continued) StatePercentageUsual Amount Virginia2.0 - 5.75%$3,000 - 17,000 WashingtonNone West Virginia3.0 - 6.5%$10,000 - 60,000 Wisconsin4.6 - 6.75%$9,700 - 145,460 WyomingNone District of Columbia4.0 - 8.5%$10,000 - 40,000