I learned recently there are seven states with no income tax and two states with no income tax, but which do tax interest and dividends.

The seven states and their major sources of tax revenue are: Alaska, receives oil and natural gas revenues and allows local sales taxes; Florida, relies on a 6 percent sales tax, property tax and a 5.5 percent corporate tax; Nevada, collects gambling and mining taxes, plus a 6.86 percent sales tax; South Dakota, a 4 percent sales tax and fuel and use taxes; Texas, benefits from taxes and royalties on natural gas and oil production, a 6.25 percent sales tax plus another 2 percent locally; Washington, has a 6.5 percent sales tax, a 1 percent corporate tax on revenue; and, Wyoming, benefits from a natural resources tax, a state property tax of 9.5 percent on fractional value, and a 4 percent sales tax.

The two states with interest and dividend taxes are: Tennessee, a 6 percent tax on interest and dividends and a 7 percent sales tax; and New Hampshire, a 5 percent tax on interest and dividends, an 8.5 percent corporate tax rate, and high property taxes.

While people probably like the idea of no income taxes, Maine has to raise money, and it does not have some of the resources as other states.

If revenue sharing and services funded by the state are removed, towns will have to significantly increase property taxes, which could easily absorb any relief people would receive from lowered or abolished income tax.

Eliminating income tax is not always a good idea.

Susan Lea, Poland

Copy the Story Link