Customer Reviews

State Tax Policy: A Political Perspective

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This is an excellent book that takes complex topics of state government taxation and makes them understandable. We learn the abilities and limitations of tax systems that were basically designed in the 19th century and how they respond to 21st century challenges. These are tax systems designed upon a manufacturing economy that has diminished. Along with the devolution of Federal government programs to the states over the past two decades, state governments need to find secure revenue bases to keep state government services operational.
The shifting of public services responsibility to states has awakened the corporate world. 1981 marked the first year that corporations paid more in state taxes than in Federal taxes. Thus, corporations have increased lobbying pressures on state governments. Numerous tax breaks have been afforded to businesses by states.
States find themselves pitted against each other in near-death spirals of competing against each other in offering tax breaks to attract businesses away from other states. Unfortunately, the differences in state taxes have been found to matter little in business location decisions.
State governments have become dependant more upon personal income tax revenues. 1998 marked the first year since the 1930s that revenues from personal sales taxes were greater than revenues from sales taxes. This reflects our changing world, as tax exempt services are an increasing part of our purchases.
The growth in personal income tax share of state tax revenues has been dramatic: it was 9% in 1950 and 19% in 1970 before reaching 34% in 1998. Sales and use taxes account for almost one third and corporate income taxes account for 6% of all state tax revenues. All state tax collections account for about 40% of what states need for their budgets. The rest is gained through federal funds, lotteries, litigation (including the tobacco settlement), license fees, and selling unclaimed properties.
This book shows would state government leaders should do to examine their taxes, reevaluate their policies, and realize where tax burdens falls. This is an excellent book for people wishing to learn the structure of what keep state governments functional.

I obtained the book as part of a research and writing project and I found it an excellent source for explaining the various state tax regimes and most issues. It tended, however, to use relatively limited references primarily to the author's prior work and a few persons who wrote critiques published with the book. It also seemed less than universal in approaching underlying causation and theory, i.e., seemed selective in what parts of economic theory to apply (production but not demand), and its critique and recommendations failed to take into account deficiencies highlighted earlier by the author or to analyze some alleged standards against which it purported to weigh the recommendations. For instance, it applied a modified standard of horizontal tax neutrality, i.e., that similarly situated taxpayers should be treated similarly, by applying an over-broad definition of what "similarly situated" means (service and manufacturing businesses are similarly situated per some analysis, i.e., some taxes apply more heavily to a capital intensive business than to a labor intensive business--but these are distinctions that make the two types of businesses dissimilar). The author recommended an extension of some policies more broadly than underlying economic theory would seem to provide, and in at least one case applied a standard in recommending tax law changes that was not enunciated as a part of the standards against which tax regimes should be measured (the so called transparency theory). Often factual assertions in support of recommendations were supported only by broad interpretations of the author of supposed population traits where neither the trait nor the possible relationship are supported by more than anecdotal observations of the author. Thus I would take the author's recommendations with a grain of salt and would acquire the book primarily for its explanation of how various state tax regimes (income, sales, property, etc.) operate and potential issues with how they impact taxpayer groups.

I had to read this for my Tax Policy class, but actually found the book very well written. I think it covers the state tax policy issues very well.

This book provides a basic overview of state policy and how it is represented through various lenses. Politicians, common people and businesses are all considered. The basic types of state level taxes and the reasons for their collection are all outlined. While sales taxes are among the most important they are also are supplemented by direct federal government grants. There is a lot of useful information here but the reader should be wary. The author makes a lot of opinionated claims and sites only his own work to support them. There are several things in here that are open to dispute and I would use this book as an introduction only. It does do a wonderful job of categorizing all of the issues and giving a springboard for further study. For those interested in public policy this is an essential book to have on hand for framing state tax issues.

On page 6 the errors begin. Brunori suggests that the federal government has been funding education. Wrong. The entire book paints a picture divorced from the reality of legislative politics and reveals a total ignorance of the information--from experts and the general citzenry--upon which legislators base their decisions. I speak from 21 years of legislative experience.