Sales Taxes
Reflecting public opinion, which objects to sales taxes less than income or property taxes, little of the tax cutting over the past few years has affected sales taxes. The three largest examples of cuts — Georgia, Missouri, and North Carolina — have involved whole or partial elimination of the portion of the sales tax levied on food.
Even in the state tax cutting environment of the last three years, there have many serious proposals to raise sales taxes. For example, sales tax increases were a part of Governor Bush’s tax plan in Texas, which failed this year, and Governor Voinovich’s Ohio plan for school finance equalization, which also failed. Wyoming legislators will likely raise their sales tax if and when they decide they can’t fund compliance with a state supreme court decision on school finance without raising taxes.
Local option sales taxes have become quite popular, with the option being offered in more states each year. More local governments are adopting the tax for the first time, and many are raising rates.