The Internal Revenue Service usually gets credit for the collective fear and trembling that grips the country every April. That's fair enough, since the IRS collects the lion's share of each American's income. Significantly compounding any national levies, however, is the ever-increasing amount skimmed by state governments. In 1970, total state tax collections were $87 billion (in 1991 dollars). By 1991, the total came to $310.6 billion, an increase of 257 percent. Over the same time period, the U.S. population increased by only 23 percent.
But state taxes aren't just getting higher; they're getting more broad-based. While sales taxes continue to net the majority of revenue for states, personal-income taxes have almost doubled their take as a percentage of the total. In a display of efficiency rare for government policy makers, the states have figured a way to nail you twice: first when you make the money and again when you spend the remaining amount.