A study by the personal finance website WalletHub examines the proportion of total personal income residents in the 50 states pay toward state and local taxes. This is their tax burden, which is different from the tax rates imposed on them based on their individual circumstances.
For example, the typical resident of a low-income state with a 7% sales tax pays a larger share of her income in sales taxes than would the typical resident of a high-income state with the same sales tax rate.
The tax burden is not uniform across the U.S., the study found. “Living in a state with a low tax burden can alleviate some of that stress,” WalletHub analyst Chip Lupo said in a statement, noting that some states charge no income or sales tax, but all have a form of property and excise taxes.
Still, Lupo said, “It’s easy to be dismayed at tax time when you see just how much of your income you lose.”
To determine which states tax their residents most and least aggressively, WalletHub collected data from the Tax Policy Center as of March 4 and compared property tax, individual income tax and total sales and excise tax as a share of personal income in each of the 50 states.
Researchers then and added the results to obtain the overall tax burden for each state.
So-called blue states ranked higher for tax burden than red ones, with an average ranking of 14.7 on the 50-state list, compared with red states’ 32.1.
See the gallery for the 15 states with the highest tax burden, according to WalletHub.
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