Taxes, unpopular though they may be, fund government services Americans count on every day. Individual income taxes may be especially hated — but they are also important, accounting for 48% of federal tax revenue. For the vast majority of states, income taxes are also critical to governments’ balance sheets. The result? Most Americans pay income tax twice every year — once to federal government, and once to their state.
No two state tax codes are exactly alike, however, and there are a handful of states that manage to function without levying an individual income tax. To identify the states with no income tax, 24/7 Wall St. reviewed state level tax codes using tax data compiled by tax policy research organization Tax Foundation.
In the vast majority of states, individual income taxes represent over 15% of annual tax revenue. Because income tax is such an important and reliable revenue source, the states with no income tax make up for the lost potential revenue in other ways.
No two state tax codes are exactly alike, however, and there are a handful of states that manage to function without levying an individual income tax. To identify the states with no income tax, 24/7 Wall St. reviewed state level tax codes using tax data compiled by tax policy research organization Tax Foundation.
In the vast majority of states, individual income taxes represent over 15% of annual tax revenue. Because income tax is such an important and reliable revenue source, the states with no income tax make up for the lost potential revenue in other ways.