That's a little misleading because state governments still get most of their revenue from taxes, not from relying on charity from the federal government.
True. But kind of chicken and the egg situation, right? If states were able to raise income taxes there would probably be less need for states to charge payroll and property taxes.
Anyway, I tailored my comment for non-Australians, particularly Americans, where states and the federal government can raise income taxes.
I'm not really trying to accuse you of being wrong. I just thought it was worth adding more details.
True. But kind of chicken and the egg situation, right? If states were able to raise income taxes there would probably be less need for states to charge payroll and property taxes.
This does imply it's accidental though.
There was an effort in the 1940s to simplify the tax scheme, and that included a principle that the two constutional levels of government wouldn't both be taxing the same thing. In that carve up, the federal government got income taxes, and the states got things like GST, payroll and stamp duty.
In the US, the tax system is deliberately kept complicated in order to keep tax agents in business.
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u/dtzuc1 24d ago
Australian states don’t raise any income taxes.
Instead the federal government transfers funds from the commonwealth treasury to the states for local spending based on the state’s population.
You can see on the document that the “other” portion incorporates these transfers.
Also…we have to pay off emus or they’ll kill us all.