Measuring the burden of taxation

Measuring the burden of taxation

Benjamin Zycher, at Tech Central Station, compares percent of income taken in taxes and tax rates as measures of state tax burden, here: "Two Tax Myths".

"...tax revenue as a proportion of income is the wrong measure [of the tax burden - Ben]. In order to see that, suppose that California imposed truly onerous tax rates on individuals with higher incomes and on successful businesses, so that many left the state. Total tax revenue would plunge, and tax revenue as a proportion of income would decline; but the true economic burden of taxation would be high.

"Accordingly, the relevant parameter is the rate at which incomes and sales are taxed..."

As a bonus, Zycher discusses the fairness and burden of property taxation under California's Proposition 13 regime. I learned about this from Virginia Postrel's blog: "Dynamist".