The (Mostly Untapped) Power of Local Income Taxes
Type
Policy Brief or Report
Year
2025
Level
City or Town
State(s)
All States
Policy Areas
Economic Justice, Finance & Procurement
Cities face growing pressure to fund public services fairly and sustainably, but over-reliance on regressive taxes like sales and property taxes burdens low- and middle-income residents. Local income taxes-especially those with progressive structures-offer a more equitable, flexible, and underused tool to diversify revenue, improve fiscal stability, and shift tax responsibility toward higher-income households.