Smaller increase in tax receipts: State, local collections dip

The Washington Times reports:

A slow economy may carry a hidden benefit for taxpayers: State and local tax collections have decreased across the board this year, according to a new report.

After rising by an average of more than 10 percent during the previous three years, individual income-tax receipts at the state and local level increased by only 2.7 percent in 2008, according to the report by the Tax Foundation, a D.C. advocacy group that lobbies for lower taxes.

Sales-tax revenues, which increased by an average of 6 percent over the three previous years, have risen only 1.7 percent this year. Corporate income-tax receipts, which had been growing by 20 percent per year during the 2005-07 period, declined by 6.6 percent in 2008, the report found.

The big reason for the decline in state and local tax collections: The economic slowdown depressed the growth of tax revenue more than it dampened gains in income, the report said.