TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Tuesday, October 23, 2012

Highest (and Lowest) State & Local Tax Burdens

Tax Foundation, Annual State-Local Tax Burden Ranking:

For nearly two decades the Tax Foundation has published an estimate of the combined state and local tax burden shouldered by the residents of each of the fifty states. For each state, we compute this measure of tax burden by totaling the amount of state and local taxes paid by state residents to both their own and other governments and then divide these totals by each state’s total income.

1

New York

12.8%

2

New Jersey

12.4%

3

Connecticut

12.3%

4

California

11.2%

5

Wisconsin

11.1%

6

Rhode Island

10.9%

7

Minnesota

10.8%

8

Massachusetts

10.4%

9

Maine

10.3%

10

Pennsylvania

10.2%

 

 

 

41

South Carolina

8.4%

42

Nevada

8.2%

43

Alabama

8.2%

44

New Hampshire

8.1%

45

Texas

7.9%

46

Wyoming

7.8%

47

Louisiana

7.8%

48

Tennessee

7.7%

49

South Dakota

7.6%

50

Alaska

7.0%

Tax Foundation

Interestingly, the ten states with the highest per capita tax burden voted for Barack Obama in the 2008 presidential election, and eight of the ten states with the lowest per capita tax burden voted for John McCain

http://taxprof.typepad.com/taxprof_blog/2012/10/highest-and-lowest.html

Tax, Think Tank Reports | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef017ee462828d970d

Listed below are links to weblogs that reference Highest (and Lowest) State & Local Tax Burdens:

Comments

What is "interesting" about the fact that the nation's armpits voted for McCain?

Posted by: Anonymous | Oct 23, 2012 5:26:24 PM

Whats more interesting is that states with the lowest burden are the ones with most natural resources or the ones that receive the most money from the federal government and they are all red states...where is Woody when we need him to explain this coincidence......

Posted by: Sid | Oct 23, 2012 9:32:33 PM

Anonymous, don't you have that backwards? It's the decaying urban states, rust belt, and ghettos that went for Obama.

Posted by: Woody | Oct 23, 2012 11:17:33 PM

So if I get this right... Those states that are more unionized or socialistic in philosophy and spending (more like Russia and Europe) and end up looking like Detroit while a balanced approach is to be ridiculed. No wonder Putin, Chaves, Castro and Hollande support Barry Soetoro. Fraud loves company

Posted by: Jeff | Oct 25, 2012 5:39:47 AM

Having lived in California for 30 + years and then living in Louisiana and Alabama respectively I can say with some authority that although the simple tax burdens are obvious, Louisiana and Alabama have hidden tax burdens that definitely impact the quality of life. For instance, the two southern states have extremely high tax on groceries, in Jefferson Co. Alabama the sewage rates are 400% higher than the rest of the nation, there are also hidden tax burdens in the form of infrastructure, i.e. no sidewalks, poor public parks, etc.

Corruption is high in these two red states as well, they have extremely large welfare burdens and they also receive more federal tax money than they pay in.

Nothing is as simple as it seems.

Posted by: smiley edna | Oct 25, 2012 6:10:38 AM

...the ones that receive the most money from the federal government and they are all red states...

Anonymous wants you to believe that red states get more federal government handouts as if it were welfare. Not true. A huge chunk of that "federal money" included in this often-quoted liberal talking point is military base spending. The fact is that military bases are most often located in red states because; they have more land to build and expand, real estate to build bases and house soldiers/marines/airmen is cheaper, red state communities welcome the military, environmental impact laws are less restrictive and red-staters join the military at a higher per-capita rate.

Posted by: DFykke | Oct 25, 2012 10:52:34 AM

Jeff,

The whole point of the article is that those "hidden tax burdens" have been taken into account in this listing of the total tax burden.

Posted by: DFykke | Oct 25, 2012 10:55:38 AM

As for red state-blue state issue, it seems common sense to me. The blue state liberals like a fair amount of government in their lives, so they support/tolerate higher taxes. The red state conservatives want less government, so they are less willing to pay taxes which puts pressure on state legislatures to keep the rates low and pass more credits and deductions.

DFykke - it was actually smiley edna that posted the "hidden tax burden" comment rather than Jeff, and you are correct that the study included all sorts of taxes such as taxes on groceries. But edna is correct that the study didn't include the hidden costs of poor infrastructure.

The Tax Foundation does a good job of putting complex information in a format that the general public can understand. Their "Putting a Face on America's Tax Returns" was simple enough that my engineer spouse said "That publication has some interesting info." Check it out if you haven't seen it.

Posted by: NOLA | Oct 25, 2012 2:26:02 PM

Why was the total "divided by the state's total income"

Clearly those states with higher per capita incomes will end up with a LOWER rating. So NY with a high number of wage earners making more than 100k a year is somehow "only a couple of percentage points" higher than a state with a median income of 50k.

Drive anywhere in my state and you never pay a fee to cross a bridge.

Not True NYC and forget about New Jersey Turnpike.

This leveling tactic gives an insufficiently honest representation of overall tax burden.

Posted by: Jim H | Oct 26, 2012 12:26:59 AM