Why would some states charge no Income Tax ?

Question

Does it imply they raise taxes on other categories.

Answer 1

They're taking away income tax because it's stupid. It doesn't imply they're raising it in other categories.

Answer 2

States with no personal income tax receive additional tax revenues from real estate taxes, personal property tax, and sales tax.

Answer 3

States that charge no income tax tend to provide lower levels of services to the people who live there. If you're a healthy adult, living in a tax-free state can be great. But if you're young, old, or ill, it's better to live in a state that has taxes.

Answer 4

Remember that taxes are a necessary evil.

Many states have made the public policy decision it raise revenue through other means.  For example, there are taxes on oil production for oil producing states like Texas and Alaska.  There are taxes on gambling revenues for Nevada.  

Answer 5

State legislatures decide what taxes will be collected in their state.  Usually the ones with no income tax make it up somewhere else, usually in other taxes.  Some, like Florida (tourism) and Alaska (tourism and oil) get significant income from other sources than their citizens.

Answer 6

Texas and Florida have no income tax.  In Texas, the state sales and use tax rate is 6.25%, but local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may also impose sales and use tax up to 2% for a total maximum combined rate of 8.25%, which is the same as California.  Property taxes are somewhat higher than they were in California, but overall, I pay less taxes in Texas than I did in California with it's 11% top bracket for income.

Answer 7

All states will get their tax revenues some way. States like Alaska, Montana, Wyoming, and Texas tax their energy resources. Nevada uses its gambling laws to generate state revenue from casinos. Washington and Florida really sock it to you on sales tax.

Answer 8

Each state has made a decision on the means by which they will raise income through taxation.  The reasoning may well be different for each of the states without income tax.  Each of them have some other source of income that covers their revenue needs.

Answer 9

The states get their income from somewhere. Income tax, property tax, sales tax are popular ways. Sometimes an industry (oil, gambling, etc) tax supplies a good portion of the taxes needed.