Ad valorem tax
- Main article: Sales tax
Sales tax is one of the primary taxes levied by state governments. Sales tax is applied to goods and services at the point of purchase. It is most often collected by the seller of the good or service and then transferred to the taxing authority.
Historically, general sales or use tax has been "one of the mainstays of state revenue systems." Presently, sales tax revenue comprises roughly one third of the total tax revenue the states collect. The lucrativeness of the sale tax for states has, however, diminished somewhat in recent years. In 1998, for the first time since the Depression, sales tax accounted for a smaller share of the states' tax collections than personal income tax.
Some have claimed that the sales tax is unfair, unduly burdening the poor because they "pay a larger percentage of their income in sales taxes than do middle- or upper-income people." Nonetheless, surveys show that citizens view consumption taxes (sales and use tax, as well as specialized sales taxes, or excise taxes) as "the most acceptable forms of taxation."
A value-added tax (VAT), is "A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. ...The amount of value-added tax that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed."
- Main article: Property tax
Most often, property tax applies to real estate, although some states impose property taxes on other kinds of personal property, such as automobiles. Property taxes comprise the lion's share of local government revenues. In 2010, property taxes accounted for 75 percent of the tax revenues collected by local governments (such as cities, counties, school districts, etc.). Conversely, states generate very little revenue from property taxes (2 percent in 2010). States that do not levy sales or personal income taxes, however, may collect greater revenues from property taxes.
- Britannica.com, "Ad valorem tax," accessed December 18, 2014
- Investopedia, "Sales Tax," accessed September 26, 2014
- Brunori, D. (2011). State Tax Policy: A Political Perspective. Washington, D.C.: The Urban Institute Press
- Investopedia, "Value-Added Tax - VAT," accessed December 18, 2014
- Tax Policy Center, "State and Local Tax Policy: How do property taxes work?" updated May 9, 2013
- Institute on Taxation and Economic Policy, "How Property Taxes Work," August 2011
- Bankrate, "Property taxes explained," February 3, 2000
- Tax Policy Center, "Residential Property Taxes in the United States," November 18, 2013
- Investopedia, "Property Tax," accessed September 26, 2014