This Chart Shows How Your State Government Is Funded
Most of us pay taxes without even understanding how taxes work after they leave our paycheck. Taxes are complex, of course, but this handy diagram reveals one important concept: how state governments are funded.
In addition to sales tax and income tax, states are financed from other sources such as corporate tax, mineral extraction tax (taxes levied on the extraction of non-renewable resources such as oil), or property tax. In the graphic below, the Pew Charitable Trusts shows the percentage of each of these sources across 50 states. This transparency is very important, especially given that there is so much in the air in our government now .
In most states, personal income tax is the largest percentage of tax dollars, and general sales taxes are the largest source in 17 of 45 states. Pew has other data (XLSX) if you want to see further breakdown of percentages.
The CRFB – Committee on Responsible Federal Budget – also has information at the federal level. You can see how federal tax dollars are spent and where that money comes in here .