2019’s Tax Burden by State
2:44 AMPosted by: Adam McCann
On April 17, Uncle Sam will once again take his cut of the past year’s earnings. And many taxpayers are already wondering how that will affect their finances. However, since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell. And with a new tax code recently signed into law, next year’s taxes will be quite different.
One simple ratio known as the “tax burden” helps cut through the confusion. Unlike tax rates, which vary widely based on an individual’s circumstances, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. And it isn’t uniform across the U.S., either.
To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state. Read on for our findings, commentary from a panel of tax experts and a full description of our methodology.
For more fun (or not so fun) facts about 2018’s tax landscape, check out WalletHub’s Tax Day Facts infographic.
Main FindingsEmbed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/20494/geochart-tax-burden.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2Hck3J4>
Overall Tax Burden by State
|
Overall Rank (1=Highest) |
State |
Total Tax Burden (%) |
Property Tax Burden (%) |
Individual Income Tax Burden (%) |
Total Sales & Excise Tax Burden (%) |
|---|---|---|---|---|---|
| 1 | New York | 13.04% | 4.62% | 4.78% | 3.64% |
| 2 | Hawaii | 11.57% | 2.20% | 2.85% | 6.52% |
| 3 | Maine | 11.02% | 4.80% | 2.69% | 3.53% |
| 4 | Vermont | 10.94% | 5.20% | 2.32% | 3.42% |
| 5 | Minnesota | 10.37% | 3.00% | 3.70% | 3.67% |
| 6 | Connecticut | 10.19% | 4.17% | 3.34% | 2.68% |
| 7 | Rhode Island | 10.14% | 4.70% | 2.31% | 3.13% |
| 8 | Illinois | 10.08% | 4.11% | 2.44% | 3.53% |
| 9 | New Jersey | 10.02% | 5.12% | 2.46% | 2.44% |
| 10 | California | 9.57% | 2.66% | 3.65% | 3.26% |
| 11 | Ohio | 9.48% | 2.90% | 2.71% | 3.87% |
| 12 | Maryland | 9.45% | 2.77% | 3.92% | 2.76% |
| 13 | West Virginia | 9.40% | 2.43% | 2.87% | 4.10% |
| 14 | Iowa | 9.32% | 3.43% | 2.50% | 3.39% |
| 14 | Mississippi | 9.32% | 2.80% | 1.72% | 4.80% |
| 16 | Wisconsin | 9.26% | 3.52% | 2.67% | 3.07% |
| 17 | Nebraska | 9.17% | 3.83% | 2.39% | 2.95% |
| 18 | Massachusetts | 9.03% | 3.60% | 3.40% | 2.03% |
| 19 | Arkansas | 8.99% | 1.79% | 2.29% | 4.91% |
| 20 | New Mexico | 8.94% | 2.03% | 1.75% | 5.16% |
| 21 | Kentucky | 8.79% | 2.03% | 3.16% | 3.60% |
| 22 | North Dakota | 8.69% | 2.20% | 1.28% | 5.21% |
| 23 | Pennsylvania | 8.66% | 2.98% | 2.56% | 3.12% |
| 24 | Indiana | 8.56% | 2.33% | 2.33% | 3.90% |
| 25 | Kansas | 8.54% | 3.07% | 1.66% | 3.81% |
| 26 | Michigan | 8.53% | 3.21% | 2.18% | 3.14% |
| 27 | Louisiana | 8.43% | 2.03% | 1.49% | 4.91% |
| 28 | Oregon | 8.38% | 3.17% | 4.10% | 1.11% |
| 29 | Utah | 8.36% | 2.46% | 2.66% | 3.24% |
| 30 | North Carolina | 8.32% | 2.30% | 2.70% | 3.32% |
| 31 | Arizona | 8.21% | 2.62% | 1.39% | 4.20% |
| 31 | Nevada | 8.21% | 2.23% | 0.00% | 5.98% |
| 33 | Texas | 8.15% | 3.70% | 0.00% | 4.45% |
| 33 | Washington | 8.15% | 2.66% | 0.00% | 5.49% |
| 35 | Colorado | 8.10% | 2.67% | 2.26% | 3.17% |
| 36 | Georgia | 8.09% | 2.75% | 2.31% | 3.03% |
| 37 | Wyoming | 8.03% | 4.17% | 0.00% | 3.86% |
| 38 | Missouri | 7.95% | 2.34% | 2.42% | 3.19% |
| 39 | South Carolina | 7.88% | 2.91% | 1.97% | 3.00% |
| 40 | Idaho | 7.87% | 2.48% | 2.30% | 3.09% |
| 41 | Virginia | 7.77% | 2.92% | 2.73% | 2.12% |
| 42 | Montana | 7.64% | 3.55% | 2.69% | 1.40% |
| 43 | Alabama | 7.24% | 1.41% | 1.86% | 3.97% |
| 44 | South Dakota | 7.22% | 2.90% | 0.00% | 4.32% |
| 45 | Oklahoma | 7.17% | 1.54% | 1.89% | 3.74% |
| 46 | New Hampshire | 7.07% | 5.60% | 0.13% | 1.34% |
| 47 | Florida | 6.64% | 2.72% | 0.00% | 3.92% |
| 48 | Tennessee | 6.47% | 2.05% | 0.11% | 4.31% |
| 49 | Delaware | 5.68% | 1.82% | 2.70% | 1.16% |
| 50 | Alaska | 4.94% | 3.54% | 0.00% | 1.40% |
Ask the Experts
For more insight on the differences in state tax policies, we asked a panel of taxation experts to weigh in with their thoughts on the following key questions:
- What state and local tax instruments are most fair? Least fair?
- What’s the relationship between state tax burden and economic growth?
- Should states and localities tax property at different marginal rates like income?
- What makes some state and local tax systems better able to weather economic downturns?
Andrew Felo Ph.D., CFE, CMA, CFM – Associate Professor & Chair, Nova Southeastern University
Joseph P. Cunningham CPA, MBA – Associate Professor, Wilson College
Marsha Huber Associate Professor, Williamson College of Business Administration
Andrew Felo Ph.D., CFE, CMA, CFM – Associate Professor & Chair, Nova Southeastern University
Joseph P. Cunningham CPA, MBA – Associate Professor, Wilson College
Marsha Huber Associate Professor, Williamson College of Business AdministrationIn order to determine the states that tax their residents the most and least aggressively, WalletHub compared the 50 states across the following three tax burdens and added the results to obtain the overall tax burden for each state:
- Property Tax as a Share of Personal Income
- Individual Income Tax as a Share of Personal Income
- Total Sales & Excise Tax as a Share of Personal Income
Sources: Data used to create this ranking were collected from the Tax Policy Center.
Image: rosedesigns / Shutterstock.com
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