Raising State Income Taxes on High-Income Taxpayers

Source: Elizabeth McNichol, Andrew Nicholas and Jon Shure, Center on Budget and Policy Priorities, April 20, 2009

As states face increasingly difficult choices for closing the gap between available resources and the cost of needed programs and services, one potential revenue source can be found at the high end of the income tax spectrum.

The personal income tax, a major source of revenue for 41 states, can yield a significant amount of money from small rate increases that involve a relatively low number of taxpayers — those that are best able to afford the cost. This is because wealth in the United States has become concentrated among the nation’s richest households to an extent not seen since the late 1920s.

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