The Washington PostDemocracy Dies in Darkness

The varied and sometimes-unfair state of state taxes, in 13 maps and charts

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As we wrote this morning, states are getting worse at forecasting tax revenue. Nearly three decades of growing revenue volatility has led to increasingly large forecasting errors, a trend with serious consequences for budget planners.

But that’s hardly all there is to understand about state taxes, which are varied, unfair in some cases, changing and still recovering from the recession.

Here’s a look at 13 charts and maps that tell the story of state taxes in America today:

State tax systems overly burden the poor

States favor their highest earners when it comes to taxation, according to a January report by the Institute on Taxation and Economic Policy.

As we reported then, the bottom fifth of earners give up nearly twice as large a share of their incomes in state and local taxes as the top 1 percent. And that skewed reliance on the poor means states are benefiting less as income inequality continues to grow.

“The vast majority of states allow their very best-off residents to pay much lower effective tax rates than their middle- and low-income families must pay — so when the richest taxpayers grow even richer, these exploding incomes hardly make a ripple in state tax collections,” the authors write.

In the report, ITEP also ranks each state on its tax fairness, based on a comparison of pre- and post-tax income. (A less-equal system widens the income gap after taxes and credits are applied, they argue. A more equal, or progressive, system narrows that gap.) Washington state is by far the most unequal, according to their ranking, mapped below. Delaware is the least.

Hover over each state to its tax inequality ranking. Darker shading and lower numbers represent less fair tax systems.

Half of state and local subsidies went to just 30 companies

The data are imperfect because state open-records laws are all over the place, but according to Good Jobs First, a policy resource center on the subject, most state and local subsidies have gone to just a few dozen companies.

Boeing has received $13.4 billion overall, more than any other business thanks mostly to a massive 2013 tax break from Washington state, according to the group’s March report. In all, 30 companies have received half of all tracked subsidies — most from the last 15 years, though some extend date further back.

Here’s a table showing the top subsidy recipient in each state:

In 30 states, revenues are still below their pre-recession peaks

The majority of states have yet to see inflation-adjusted revenue surpass pre-recession peaks, according to a Pew Charitable Trusts analysis of third-quarter data from last year. Tax collections are at or above 15 percent of their pre-recession peak in North Dakota, Minnesota and Illinois. But they are also 15 percent or more below their peak in Alaska, Wyoming and Florida.

Seven states have no personal income tax at all

As the map above and published Wednesday shows, 43 states levy an individual income tax of some kind.

Of those, New Hampshire and Tennessee only tax dividend and investment income, while eight others tax everyone at the same rate. That leaves 33 states that have multiple income tax brackets. But there’s big variations even among that group: Kansas, Nebraska and Oregon levy two-rate income taxes, while Hawaii has 12 brackets, according to the Tax Foundation.

The top marginal rate in states that levy an income tax ranges from Pennsylvania’s 3.07 percent to California’s 13.3 percent.

Tennessee has the highest beer taxes

Every state taxes beer but the rates vary hugely. The Southeast imposes some of the highest beer taxes, with Tennessee leading among all states with a $1.29 per-gallon beer tax. Wyoming’s is lowest at just 2 cents per gallon, according to the map above, published last February.

Wine taxes are highest in Kentucky

It may come as little surprise that the home of the bourbon trail taxes wine more than any other state. Wine taxes range from as little as 11 cents in Louisiana to as much as $3.56 in Kentucky. The map above, published last February, excludes the five states that control all sales, though they still may impose other taxes on wine.

Every state still relies on the federal government for revenue

It’s worth noting that states aren’t isolated from the federal government when it comes to revenues. While taxes are a critical source, the federal government accounts for nearly a fifth of state revenue overall, according to a December Pew Charitable Trusts report.

Mississippi is most reliant on the federal government for revenue, while Wyoming is the least, they found.

The effect of the late-2012 federal fiscal cliff is only now starting to wear off

No chart or map here, but it’s worth noting that federal policy can have a lasting impact on state taxes, too. The late-2012 fiscal cliff — the fight over a big set of looming tax hikes and spending cuts—continued to have an impact on state revenues until late last year, according to an analysis by the Nelson A. Rockefeller Institute of Government at the State University of New York.

That long and at-the-time unpredictable fight altered investor behavior, leading many to shift income to the 2012 calendar year to avoid a potential — and eventual — capital gains tax hike. While states saw it coming, the size of the impact was never clear, the analysts noted in their February report. It led to unsteady revenues quarter after quarter, though its “disappearing impact” now means states can expect steady and continued growth, they found.

States hiked cigarette taxes 5 times more than alcohol taxes since 2000

States have raised tobacco taxes 111 times between the 2000 and 2015 fiscal years. They cut them just four times. Alcohol taxes, on the other hand, have been raised 23 times and cut eight times over the same period.

As the map below shows, cigarette taxes are as high $4.35 for a pack of 20 cigarettes in New York and as low as 17 cents in Missouri.

States have enacted net tax cuts in 3 of the last 4 fiscal years

States slashed taxes and fees by $2.3 billion in fiscal 2015, more than the year before, according to a fall fiscal survey from the National Association of State Budget Officers.

States have cut taxes in three of the past four fiscal years on net, the group notes, though this year’s are mostly minor suggesting states are hesitant about taking too much stock in their rebounding economies.

Florida, Minnesota, New York and Texas saw the biggest tax and fee cuts in fiscal 2015, while 21 states overall saw cuts. Ten states raised taxes or fees.