Best and Worst States For Taxes (2000 Bush States Are Best, Gore States Are Worst!)

MSN | 2/11/03 | Phillip Harper

[Recovering_Democrat]

The state of your tax bill depends in no small measure on your state.

That's because the tax burdens imposed by the 50 states are as varied as their landscapes. You can pump up your business's bottom line by being smart about where you decide to operate.

Of course, taxes aren't the only criteria people apply when choosing a business venue. If they were, Alaska would be far more crowded; by almost any measure, its residents pay the lowest tax rate in the nation...

To assess relative state tax burdens accurately, the Tax Foundation adjusts National Income and Product Account data collected by the U.S. Department of Commerce's Bureau of Economic Analysis. One important comparison the foundation makes is of the total tax burden in each state (including federal taxes) to just the state/local tax burden. In both cases, taxes are measured as a percentage of income.

When federal taxes are included, the 10 states that imposed the lowest total tax burdens in 2002 were:

State	Income Tax (in %)
1. Alaska 2. Oklahoma 3. (tie) West Virginia     Alabama 5. Tennessee 6. North Dakota 7. South Dakota 8. (tie) Mississippi     Montana 10. Louisiana	27.0 29.0 29.1 29.1 29.2 29.5 29.7 29.8 29.8 30.1

Meanwhile, the highest total taxes were levied in:

State	Income Tax (in %)
50. Connecticut 49. Washington 48. New York 47. New Jersey 46. Wyoming 45. Wisconsin 44. Minnesota 43. (tie) Michigan      Illinois 41. California	36.7 35.6 34.7 34.3 34.1 33.2 32.9 32.8 32.8 32.7

[Uncle Miltie]

Note also that the high-income states vote Gore, and the low income states vote Bush. Rich Democrats make me puke.

B.C., FARGO, ND! Yah!

[applemac_g4]

Something fishy about these lists. I find it hard to believe that Washington is second worst with no income tax.

[timestax]

bump

[Eva]

Not true, Washington is not heavily populated, has no income tax and low property taxes, but we are still #2 on the list of most heavily taxed states.

[Clemenza]

I've seen better studies than this one indicating what a high-tax state Connecticut has become. I can honestly say that CT and NJ only look good taxwise when compared to New York CITY, although even that is not entirely true, as our property taxes here in the city (despite Bloomberg's recent hike) are still substantially lower than the suburbs.

[Mr. Bird]

So what's not true? Regardless of population or the presence of local taxes, if the majority of Washingtonians earn substantial salaries, the percentage burden will be necessarily higher than that of a state with lower average salaries.

Example: If average income in MS is $20k/year, their federal percentage burden falls in the 15% range. If WA averages $70k, the percentage burden is closer to 27%. So, a state with higher incomes (note NY, CT, and NJ) will by definition have a higher percentage burden.

[Mr. Bird]

It's all about per capita income. The progressive income tax structure automatically increases the percentage burden on states with high salaries (relative to others).

You can break it down even further, to show the silliness of the data here. I would wager that the percentage burden of taxes in Darien, CT blows Hartford, CT out of the water, simply because income levels in Darien are higher than Hartford.

[Eva]

The average family wage in the county where I live is $23,000/yr. There are counties in more rural areas where the family wage is considerably lower, where logging has been the tradition and families go on welfare and unemployment for five months out of every year.