State Tax Capacity:
State Tax Effort - Effective Tax Rate

Choose Submeasure

For the Year

State Tax Effort - Effective Tax Rate

Why is this important?

This is a measure of the extent to which the state has additional capacity to generate tax revenue should it choose to do so. It indicates whether or not tax increases are a valid policy option.

What are the policy implications?

Sources of revenues state versus students for funding higher education are affected by this measure.

Other factors to consider:

See all of the measures linked to the Understanding Higher Education Finance diagram.

Data sources and related links:

State Higher Education Executive Officers (SHEEO),