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In order to maintain up consistency throughout the part score, tax credits are converted into equivalent income exemptions or deductions. New Hampshire and Tennessee both tax only curiosity and dividends. To account for this, the Index converts the statutory tax price in both states into an efficient rate as measured against the typical state revenue tax base that includes wages. Under a typical earnings tax base with a flat price and no tax preferences, that is the statutory price that might be required to lift the identical quantity of revenue as the present system. Nationally, dividends and interest account for 19.6 percent of earnings.

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