Ranking of States By Tax Burden

This Week's Quote:

You can’t win until you know how to lose.  (e.g.  make a bad shot and break your bow - you don’t know how to lose yet)

                                                            -John Dudley

Lots of articles are written about the taxes paid by a resident of a particular state.  And, which is the best and worst state to live in, at least, from a tax standpoint.  Many of these stories don’t make sense.  I fear many are purposefully written so as to be confusing for a variety of self-serving reasons.  In the tax rankings by state that follows, the methodology used seems a little more straightforward.  As further explained below, they just did the math.  They didn’t nitpick or highlight a bunch of meaningless tax laws only for the sake of publicity. 
 
                                                              -Mark Bradstreet

Ideas, comments and the ranking chart are from the Wallethub story written by Adam McCann on March 31, 2021.  
 
TAX BURDEN BY STATE

This year, Uncle Sam will take his cut of the past year’s earnings on May 17, slightly later than usual due to the COVID-19 pandemic. Many taxpayers are undoubtedly wondering how this year’s Tax Day will affect their finances, as a lot of people are struggling financially as a result of the pandemic. Since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted.

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.
                                                                                                           
Adam McCann, Wallethub (March 31, 2021)
 
Overall Tax Burden by State

Credit Given to:  Adam McCann, Wallethub published March 31, 2021.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We also welcome and appreciate anyone who wishes to write a Tax Tip of the Week for our consideration. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This Week’s Author, Mark Bradstreet

-until next week.