American taxpayers can find it hard to understand exactly how they are affected by the U.S. tax code because it is so complex, personal finance website WalletHub notes in a new report.
The report seeks to simplify the matter by examining what it calls the "tax burden."
Unlike tax rates, which can vary significantly depending on individual situations, tax burden focuses on the share of total personal income residents pay in state and local taxes. This burden is not the same across the country.
"It's easy to be dismayed at tax time when you see just how much of your income you lose," WalletHub analyst Chip Lupo said in a statement. "Living in a state with a low tax burden can alleviate some of that stress."
Lupo points out that some states charge no income tax or no sales tax, although all states have some form of property taxes and excise taxes.
To identify where residents face the highest tax burdens, WalletHub compared all 50 states by examining three major types of state tax burdens — property taxes, individual income taxes, and sales and excise taxes — and calculating their cost as a percentage of total personal income in each state.
In order to determine where residents face the most and least aggressively, WalletHub compared the 50 states across these following three tax burdens:
— Property tax as a share of personal income
— Individual income tax as a share of personal income
— Total sales and excise tax as a share of personal income
Researchers then added the results to obtain the overall tax burden for each state.
See the gallery for the 12 states with the heaviest tax burdens.
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