- The Washington Times - Friday, July 27, 2001

Three states with no individual income taxes showed the largest gains in total tax revenue between 1990 and 2000, the Census Bureau says.

In a study being released today, the bureau reports that New Hampshire's tax revenues rose 58 percent; Alaska's, 57 percent; and Wyoming's, 19 percent.

At 16 percent, California had the next highest total tax revenue increase, but it imposes an individual income tax.

Across the nation, state tax revenues grew to $540 billion in 2000, an increase of 8 percent over the $500 billion collected the previous year. That means that, in the period covered, the states collected the equivalent of $1,922 for every man, woman and child in the country. However, the per-capita taxes varied from state to state. In Connecticut, the figure was $2,987. That was the highest per-capita tax. South Dakota's $1,228 was the lowest.

The Census Bureau credits New Hampshire's great revenue leap to the enactment of unspecified new tax measures. Alaska's gain came from increased revenues from oil and natural gas that in turn increased the take from business licenses and occupation fees. Wyoming apparently has profited from increased economic growth.

Ryan Horn, a manager at Americans for Tax Reform, explains. After first noting that he has not seen the Census Bureau's full report and can only speculate, he says:

"I'm not surprised that states without an income tax show greater revenue growth. Income tax comes from wages and salaries, from profits from corporations and from capital gains. Where has the economic slowdown occurred? In the corporate sector, in equity markets and to a limited extent in the labor market," he said.

"It has not occurred in the real estate market and in consumer spending," Mr. Horn said. "And the two sources of tax revenue outside of income taxes are property and sales taxes. That's where the tax money is coming from."

William Gale, a Brookings Institute economist, says: "You shouldn't read too much into the fact three states without an income tax increased their revenues. It strikes me that the presence or absence of an income tax isn't the issue. Without seeing the report, I can only make an intuitive judgment, and that would be that in each state there are specific and distinct reasons for the growth like oil revenues in Alaska and high sales tax revenues elsewhere."

Indeed, state governments vary in the reliances they put on specific taxes. In general, they receive most of their tax income from occupation and business licenses, income taxes and so-called "severance revenues, " or taxes on nonrenewable resources such as oil, gas and coal.

Revenues from such sources as license fees were up 16 percent, and income tax revenues climbed 13 percent. Severance revenues in the 36 states that impose such taxes increased 39 percent.

A few states gathered most of their tax revenue from individual income and general sales taxes. Georgia led that group, increasing its revenue from those two sources by 81 percent. Then came Massachusetts, Hawaii and Colorado, with 78 percent increases, and Utah, up 77 percent.

North Dakota, Vermont, Wyoming, Montana, Delaware, New Hampshire and Alaska obtained less than 50 percent of their tax revenue from those income and sales taxes.

No state had a decrease in tax revenue during the decade.

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