Thursday , 29 September 2016


U.S. State Tax Rates: A Ranking of Most & Least Burdensome

…As this year’s tax-filing deadline…looms closer, it’s fair to wonder tax-(1)which states have the most and least burdensome tax rates. WalletHub’s analysts searched for answers, comparing state and local tax rates in the 50 states and the District of Columbia against the national median… calculating relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income. [Below are the results.]

It’s no secret that tax bills aren’t created equal but, while most of us understand that some states don’t charge income or sales taxes, we might not realize how state-by-state tax differences result in paying considerably more or less than our neighbors in other states. To answer that question, WalletHub has released its report on:

2016’s States With The Highest & Lowest Tax Rates

Effective Total State & Local Tax Rates on Median U.S. Household* Annual State & Local Taxes on Median U.S. Household* % Difference Between State & Nat’l. Avg.** Annual State & Local Taxes on Median State Household*** Adjusted Overall Rank (based on Cost of Living Index)
1 Alaska 5.69% $3,066 -46.85% $4,237 6
2 Delaware 6.02% $3,246 -43.74% $3,830 1
3 Montana 6.92% $3,728 -35.37% $3,561 3
4 Wyoming 7.45% $4,015 -30.40% $4,312 2
5 Nevada 7.72% $4,161 -27.86% $4,028 7
6 Tennessee 7.95% $4,284 -25.75% $3,523 4
7 Idaho 8.48% $4,569 -20.80% $4,074 5
8 California 8.80% $4,741 -17.81% $6,803 33
9 South Carolina 8.80% $4,742 -17.80% $4,009 9
10 Florida 9.03% $4,868 -15.62% $4,305 11
11 Oregon 9.17% $4,943 -14.32% $5,392 34
12 Colorado 9.41% $5,070 -12.11% $5,854 15
13 Alabama 9.43% $5,080 -11.94% $4,081 8
14 Utah 9.53% $5,133 -11.02% $5,802 10
34 Washington 11.69% $6,302 9.25% $7,722 37
35 Maryland 11.85% $6,387 10.71% $9,320 44
36 Indiana 11.86% $6,390 10.77% $5,506 24
37 Kentucky 11.97% $6,449 11.78% $5,104 27
38 Mississippi 12.11% $6,525 13.11% $4,782 18
39 Pennsylvania 12.22% $6,583 14.12% $6,388 38
40 Arkansas 12.25% $6,603 14.46% $4,975 29
41 Kansas 12.29% $6,625 14.84% $5,853 28
42 New Jersey 12.39% $6,675 15.70% $10,891 47
43 Iowa 12.75% $6,872 19.12% $6,071 31
44 Ohio 12.97% $6,991 21.19% $5,892 36
45 Michigan 13.09% $7,054 22.28% $5,717 35
46 New York 13.38% $7,211 25.00% $9,342 51
47 Rhode Island 13.46% $7,255 25.77% $8,497 48
48 Connecticut 13.48% $7,262 25.89% $10,131 50
49 Wisconsin 13.58% $7,316 26.82% $7,065 41
50 Nebraska 13.85% $7,466 29.41% $6,525 39
51 Illinois 14.54% $7,836 35.83% $8,100 43

 

With tax season in full gear, WalletHub’s analysts compared various tax rates among the 50 states and the District of Columbia in terms of the national average consumer’s income and spending habits. [The results were as follows:]

States With The Highest & Lowest Tax Rates

Comparing the States with the Highest & Lowest Tax Rates

  • Tax rates in the most expensive states are 3x higher than those in the least expensive states.
  • Tax rates are 10.56% higher in Blue States (an average of $6,040) than in Red States (which average $5,463).
  • New York has the highest cigarette excise-tax @ $4.35, which is 26x higher than in Missouri…[which has] the lowest @ $0.17.
  • Washington has the highest sales and excise tax rate @ 8.16%, which is 9x higher than in Oregon…[which has] the lowest rate @ 0.93%.
  • Pennsylvania has the highest gas tax @ $0.5040 per gallon, which is twice as high as in Alaska, the state with the lowest @ $0.1225 per gallon.

Disclosure: The original article, as written by the staff of ValueWalk.com, was edited ([ ]) and abridged (…) to ensure a fast & easy read.

“Follow the munKNEE” on Facebook, on Twitter or via our FREE bi-weekly Market Intelligence Report newsletter (see sample here , sign up in top right hand corner)

Related Articles from the munKNEE Vault:

1. Low Income Taxes Actually Work Against the Economic Interests Of Most Americans!

Anti-tax demagoguery in the U.S. has resulted in Americans paying almost four times as much as the citizens of other wealthy countries for things such as retirement security and health care on the private market – 10.6% of our economic output versus an average of just 2.7% among Organization for Economic Cooperation and Development (OECD) member states. As the title of this article suggests low taxes in the U.S. come at a very high cost.

2. Country Comparison Of Highest Personal Income Taxes Paid By Individuals

The best way to compare countries based on taxes is using the highest personal income tax rate paid by individuals so this excludes countries that do not have personal income taxes. Let’s see how select countries compare.

3. Taxes Vary Dramatically Around the World – How Does Your Country Compare?

Compared with Ireland, where the individual tax rate is a whopping 48%, the U.S. national average of 36.9% is not so bad. How does your country compare?

4. The Top 5 States Residents Are Fleeing Due To Financial Repression (Increased Taxes)

The past few years have really put the squeeze on cash-strapped states to find new sources of revenue. This environment has generated a level of tax aggression from certain states, which in turn has resulted in a net loss of revenue instead of the intended gain. Residents have begun voting with their feet, deciding to move out of the state instead of thinning their pocket through unwanted taxation. So which states are chasing away their residents? How does it impact you if you live in one of them? We track migratory patterns through our residency product data, and while some of the states are no-brainers, others may surprise you. [Take a look.]

5. America’s Inability to Increase Revenues Via Higher Taxes Will Ultimately Cause USD to Crash

A dollar crash might happen because foreign investors decide that the U.S. has fallen into a so-called tax trap, which occurs when a nation is unable to increase revenue by lifting tax rates. This circumstance, paired with mounting deficits, can lead to wholesale flight from a nation’s assets. The Chinese will only lend money if they think we will pay it back.