Earlier this week we wrote about a failed Senate effort to refer to the voters a constitutional amendment prohibiting a state income tax. Although Washington voters have rejected a graduated personal income tax several times in recent years, advocates still promote the idea.
So we thought it might be helpful to share a recent report from the Tax Foundation that looks at state income taxes across the country. Overall, TF reports,
Forty-three states levy individual income taxes. Forty-one tax wage and salary income, while two states—New Hampshire and Tennessee—exclusively tax dividend and interest. Seven states levy no income tax at all. Tennessee is currently phasing out its Hall Tax (income tax applied only to dividends and interest income) and will repeal its income tax entirely by 2022.
Of those states taxing wages, eight have single-rate tax structures, with one rate applying to all taxable income. Conversely, 33 states levy graduated-rate income taxes, with the number of brackets varying widely by state. Kansas, for example, imposes a two-bracket income tax system. At the other end of the spectrum, two states—California and Missouri—each have 10 tax brackets. Top marginal rates range from North Dakota’s 2.9 percent to California’s 13.3 percent.