Why Are Regional Income Tax Rates So Disparate?

Regional income tax varies depending on the laws that regulate the area. Federal guidelines will apply to all regions and states; however, regional income tax authority manifests itself in different ways such as through state agencies. There is a Regional Income Tax Agency based in Ohio that regulates the taxes of many different municipalities. State income tax is not required by the federal government but they help states to fund different state agencies, projects and programs.

Different State Requirements

The requirements by different states for their taxes are the main reason for the difference in regional tax rates. Some states have not altered their requirements while others have eliminated certain taxes, or added new taxes.

Population and Income

The income of a certain region can directly affect the population in that area. If there are jobs and available income in a region it will attract people to the region. The tax rates of the region will be influenced based on what the region might need in order to support the citizens in that particular region.