Governing Magazine Examines The Way We Tax

The February 2003 issue of Governing, a monthly magazine that aims to reach primarily state and local government officials, featured the results of its annual "Government Performance Project." This year's study, The Way We Tax: A 50-State Report, explores the tax systems of all fifty states and concludes that a large majority of them are out-of-date, inadequate, and unfair. The report says that these structural flaws, which include few taxes on services, corporate tax loopholes, and lack of balance between income, property, sales, and business taxes, are partially responsible for the current large budget shortfalls. On the other hand, the authors add, a time of great fiscal woes may provide the best opportunity for tax-structure reform.

The Way We Tax grades every state's tax system based on its adequacy, fairness, and management. Individual state report cards, as well as reports on the best states and a summary of the study's findings, are available on the Governing website.

Prepared February 7, 2003