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 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.

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 State StatePercentageUsual Amount Alabama %$ ,000 AlaskaNone Arizona %$10, ,000 Arkansas %$3, ,000 California %$6, ,815 Colorado4.63%Flat Rate Connecticut %$10, ,000 Delaware %$5, ,000 FloridaNone Georgia %$ ,000 Hawaii %$2, ,000 Idaho %$1, ,055 Illinois3.0%Flat Rate Indiana3.4%Flat Rate Iowa0.36 –8.98%$1, ,436

General Income Tax Rate by State (continued) StatePercentageUsual Amount Kansas %$15, ,000 Kentucky %$3, ,000 Louisiana %$12, ,000 Maine %$4, ,450 Maryland %$1, ,000 Massachusetts5.3%Flat Rate Michigan4.35%Flat Rate Minnesota %$21, ,591 Mississippi %$5, ,000 Missouri %$1, ,000 Montana %$2, ,900 Nebraska %$2, ,001 NevadaNone New HampshireDividend and Interest Income Only New Jersey %$20, ,000

General Income Tax Rate by State (continued) StatePercentageUsual Amount New Mexico %$5, ,000 New York %$8, ,000 North Carolina %$12, ,000 North Dakota %$31, ,701 Ohio %$5, ,000 Oklahoma %$1, ,701 Oregon %$2, ,300 Pennsylvania3.07%Flat Rate Rhode Island25% of Federal Taxes South Carolina %$2, ,350 South DakotaNone TennesseeDividend and Interest Income Only TexasNone Utah5.0%Flat Rate Vermont %$32, ,700

General Income Tax Rate by State (continued) StatePercentageUsual Amount Virginia %$3, ,000 WashingtonNone West Virginia %$10, ,000 Wisconsin %$9, ,460 WyomingNone District of Columbia %$10, ,000