1. B RUNORI C HAPTER 1 I MPORTANCE OF T AXATION F EDERAL, L OCAL, AND S TATE

2. C HALLENGES General Trends Shift in economy from manufacturing to services and intellectual property Electronic commerce Business cycle swings Devolution of responsibility to state level Politics of anti-taxation Concern with economic development

3. C ONTINUING I MPORTANCE OF S TATE T AXATION Just as citizens will continue to demand services, state governments – as they have throughout history – will need to find the revenue to pay for these programs. In the past, state political leaders have proved resourceful in financing government services despite the often-significant political and economic challenges to state tax systems. Thus, the question is not whether taxes will raise the necessary money, but from which groups the funds will be collected.

4. A L OOK AT S TATE T AX P OLICY Benchmarks Fair Efficient Stable Accountable Interstate competition and taxation Political pitfalls Electoral Legislative

5. P RESSURE ON S TATE T AXES Sales and use Personal income Corporate income Other state taxes Other sources of revenue

6. F EDERAL T AXES Income Tax Personal Corporate Payroll taxes Excise Taxes Fuel Tobacco and alcohol Communication and transportation Tax Policy Center

7. S TATE R EVENUE S OURCES Intergovernmental transfers Income taxes Personal Corporate Sales taxes General sales and gross receipts Selective sales tax Charges and miscellaneous receipts Other taxes Tax Policy Center

8. L OCAL Inter-governmental transfers Property taxes Charges and miscellaneous receipts Sales and gross receipts tax Individual income Other taxes Tax Policy Center