Yesterday our friends at the Tax Foundation released their annual State-Local Tax Burden study which highlights what state’s taxpayers are facing the highest and lowest tax burdens in the country. This study not only takes into consideration the state and local taxes you pay where you live but also what you may pay to other states when you shop, travel, or work in other states.
Some of the highlights from the report include:
- Taxpayers in New York, New Jersey, and Connecticut bore the highest South Dakota, Nevada and Alaska experienced the lowest, under 8%. state-local burdens in the country at over 12%, while residents in
- The nation as a whole paid 9.8% of its income in state and local taxes, down slightly from 9.9% in 2008 and down significantly from 10.4% in 1977, the earliest year for which the Tax Foundation has done such estimates.
- While it is useful and informative to look at the national trend, burdens among the states can vary widely. Taxpayers in high-tax New Jersey, for example, pay almost twice the state-local tax rate (12.2%) as those in Alaska, the state with the lowest burden (6.3%).
- Many taxpayers themselves are unaware of how much of their state and local tax burden is paid into the coffers of states other than their own. Alaska, for example, is able to shift almost 80 percent of its tax collections to residents of other states.
No real surprises with New Jersey at the top and Alaska at the bottom but there has been some jockeying with the other states in the middle. Unfortunately for The Heartland Institute we have just started having to pay a higher tax here in Illinois due to lame duck tax hikes passed on internet purchases, businesses, and income. How is your state doing? Have high taxes ever driven you away from a high tax state like New Jersey to a lower taxed state such as Texas or Nevada?