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The mainstay of local taxation is the tax on real estate, known as the property tax. It is used to fund an array of critical state and local services, most notably public schools.

Most states and localities generate a significant portion of state and local revenue from the taxation of retail sales. Such taxes are attractive because they are relatively easy to administer.

How to improve the tax code is the subject of much debate. Proponents of reform often call for increasing fairness and simplicity. But people define those concepts in different ways.