What U.S. states have the highest and lowest taxes?

[CaféAuLait]

What U.S. states have the highest and lowest taxes?

The site looked at 10 different taxes, from property and state and local income taxes to those on vehicles, food, alcohol, fuel, telecommunications and sales. The total tax hit was based on a hypothetical individual earning $65,596, with a $174,600 home, a $17,547 car and who spends a set amount -- the national average -- on everything from groceries to gas.

The result: This individual pays $9,718 in state and regional tax levies if he lives in New York. That's nearly 15 percent of his income. But he pays just $2,364, less than 4 percent of gross income, if he lives in Wyoming.

10 states with the lowest average annual tax burden:

1. Wyoming, $2,365
2. Alaska, $2,791
3. Nevada, $3,370
4. Florida, $3,648
5. South Dakota, $3,766
6. Washington (state), $3,823
7. Texas, $5,193
8. Delaware, $5,195
9. North Dakota, $5,588
10. New Mexico, $5,822

10 states with the highest average annual tax burden:

1. New York, $9,718
2. California, $9,509
3. Nebraska, $9,450
4. Connecticut, $9,099
5. Illinois, $9,006
6. Wisconsin, $8,975
7. Vermont, $8,838
8. New Jersey, $8,830
9. Iowa, $8,788
10. Maine, $8,622

http://www.cbsnews.com/news/what-us-states-have-the-highest-and-lowest-taxes/

Wow, quite a difference, 15 percent of income compared to 4 or under 4 percent. Add in federal taxes and its a double whammy.

Now are benefits in those states, such as infrastructure, schools, etc. much better than the states with the lower taxes?

 

[Bombur]

Not all states are created equal and this analysis is more complex than the study suggests.

Florida for example is a state that has a lot of tourism and is able to shift their tax burden away from residents.

New York has New York City which is a mix of very wealthy people and millions of poor people. It is also home of some of the most expensive property in the world. So when you assume a home worth $174K it is hard to apply that assumption to people in NYC and Wisconsin equally.

Economic activity in NYC impacts the surrounding states of NJ and CT. The article mentions that the CT resident can just move across the border to RI to save. Income tax is based on where you work so moving won't help. Not to mention the eastern part of CT is the rural part. The money is closer to NYC, Hartford, and the coast.

It also doesn't take into account how states subsidize one another. The high income states like CT and NJ subsidize poorer states.

State and local money tends to go towards education, Health (Medicaid), public safety, and infrastructure.

Medicaid is pretty straight forward in that it is a function of the number of people eligible and the cost per person. A state like NJ will have different cost issues than a state like Wisconsin. It is not so much about quality as it is about the cost of care and the economic conditions that lead to people needing Medicaid.

EDIT: I will add that economic activity in one state which pushes up income and costs will make other states more appealing options. This is a relatively natural part of economics and there is really no point in trying to fix it. The only thing to do is try and address the consequences of it.

 

[DGS49]

"Income tax is based on where you work..."? Not usually. There are some exceptions (most conspicuously, NYC), but for most of us, our state and local taxes are based on where we live, not where we work.

The numbers probably can't quantify intangibles relating to quality of life (in which California surpasses most other states), relative cost of living, or compensation for comparable work. For example, a bean counter in Manhattan will probably make twice as much as an accountant in San Antonio, so the higher taxes in NYC are more than compensated for by the higher compensation.

Contrarily, however, the NYC beancounter will probably be paying 35-40% of his gross on housing, as compared to 15-20% for the Texan.

Also contrarily, the NYC beancounter doesn't require an automobile under normal circumstances, so he pays much less on day-to-day transportation than the Texan.

In short, it's very complicated.

 

[Bombur]

"Income tax is based on where you work..."? Not usually. There are some exceptions (most conspicuously, NYC), but for most of us, our state and local taxes are based on where we live, not where we work.

The numbers probably can't quantify intangibles relating to quality of life (in which California surpasses most other states), relative cost of living, or compensation for comparable work. For example, a bean counter in Manhattan will probably make twice as much as an accountant in San Antonio, so the higher taxes in NYC are more than compensated for by the higher compensation.

Contrarily, however, the NYC beancounter will probably be paying 35-40% of his gross on housing, as compared to 15-20% for the Texan.

Also contrarily, the NYC beancounter doesn't require an automobile under normal circumstances, so he pays much less on day-to-day transportation than the Texan.

In short, it's very complicated.

Yes it most certainly matters where the income is sourced.

 

[CrusaderFrank]

Nebraska??? WTF??

 

[kiwiman127]

Nebraska??? WTF??

Scott Walker's Wisconsin? WTF?
I know that my Minnesota is up there with high taxes but the Democratic governor wants to lower taxes on the middle class because of the huge surpluses he has provided under his leadership. The legislation has passed the Minny House and has been sent to the Senate. Four years ago, Minnesota had a bigger deficit than neighboring Wisconsin, now we have a larger surplus than Wisconsin.
This just shows that sometimes conservatives approaches work best and sometimes liberal approaches work best. Amazing, isn't it?

 

[Howey]

Since I don't pay taxes (other than sales tax) I'd say the state I live in!

 

[DGS49]

"...sometimes liberal approaches work best..."

You mean like having tax rates that are too high and have to be adjusted?