A new study by WalletHub revealed that residents of New York state are burdened by taxes the most among the 50 states, while Alaska residents have the lowest tax burden.
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, according to WalletHub.
To determine the residents with the biggest tax burdens, WalletHub compared the 50 states based on the cost of three types of taxes—property taxes, individual income taxes, and sales and excise taxes—as a share of total personal income in the state.
The following are some key findings from WalletHub’s study:
- As previously stated, New York has the highest overall tax burden, while Alaska has the lowest.
- Maine has the highest property tax burden, while Alabama has the lowest.
- California has the highest individual income tax burden, while seven states (including Texas, Florida, and Washington) have the lowest.
- Washington has the highest sales and excise tax burden, while New Hampshire has the lowest.
- Red states have a lower tax burden than blue states, on average.
The following is how the states rank by overall tax burden, with No. 1 being the highest and No. 50 being the lowest, according to WalletHub:
Overall Tax Burden by State
| Overall Rank | State | Total Tax Burden (%) | Property Tax Burden (%) | Individual Income Tax Burden (%) | Total Sales & Excise Tax Burden (%) |
|---|---|---|---|---|---|
| 1 | New York | 12.02% | 4.36% (5) | 4.63% (2) | 3.03% (31) |
| 2 | Hawaii | 11.80% | 2.64% (25) | 3.82% (6) | 5.34% (3) |
| 3 | Vermont | 11.12% | 4.85% (2) | 3.09% (11) | 3.18% (27) |
| 4 | Maine | 10.74% | 4.86% (1) | 2.59% (21) | 3.29% (24) |
| 5 | California | 10.40% | 2.73% (23) | 4.87% (1) | 2.80% (37) |
| 6 | Connecticut | 10.08% | 3.95% (6) | 3.42% (9) | 2.71% (40) |
| 7 | Minnesota | 9.95% | 2.82% (22) | 4.01% (4) | 3.12% (28) |
| 8 | Illinois | 9.67% | 3.67% (9) | 2.57% (22) | 3.43% (21) |
| 9 | New Jersey | 9.47% | 4.59% (3) | 2.36% (30) | 2.52% (44) |
| 10 | Rhode Island | 9.38% | 3.83% (7) | 2.49% (24) | 3.06% (30) |
| 11 | Utah | 9.35% | 2.19% (38) | 3.57% (7) | 3.59% (16) |
| 12 | Kansas | 9.29% | 3.04% (16) | 2.67% (17) | 3.58% (17) |
| 13 | Maryland | 9.26% | 2.60% (30) | 4.00% (5) | 2.66% (41) |
| 14 | Iowa | 9.21% | 3.39% (12) | 2.39% (29) | 3.43% (21) |
| 15 | Nebraska | 9.16% | 3.55% (10) | 2.60% (20) | 3.01% (32) |
| 16 | Ohio | 8.92% | 2.72% (24) | 2.48% (26) | 3.72% (13) |
| 17 | Indiana | 8.85% | 2.14% (39) | 3.06% (12) | 3.65% (14) |
| 18 | Arkansas | 8.79% | 1.65% (48) | 2.26% (32) | 4.88% (6) |
| 19 | Mississippi | 8.76% | 2.63% (26) | 1.86% (36) | 4.27% (8) |
| 20 | Massachusetts | 8.55% | 3.35% (13) | 3.37% (10) | 1.83% (45) |
| 21 | Virginia | 8.45% | 2.89% (21) | 2.98% (14) | 2.58% (43) |
| 21 | West Virginia | 8.45% | 2.22% (37) | 2.61% (19) | 3.62% (15) |
| 23 | Oregon | 8.44% | 2.95% (18) | 4.30% (3) | 1.19% (48) |
| 24 | Colorado | 8.42% | 2.93% (20) | 2.49% (24) | 3.00% (33) |
| 25 | Pennsylvania | 8.36% | 2.62% (28) | 2.64% (18) | 3.10% (29) |
| 26 | Wisconsin | 8.32% | 2.98% (17) | 2.57% (22) | 2.77% (39) |
| 27 | Louisiana | 8.29% | 1.83% (46) | 1.57% (39) | 4.89% (5) |
| 28 | Kentucky | 8.26% | 1.89% (43) | 2.98% (14) | 3.39% (23) |
| 29 | Washington | 8.04% | 2.58% (31) | 0.00% (44) | 5.46% (1) |
| 30 | New Mexico | 8.03% | 1.86% (44) | 1.13% (40) | 5.04% (4) |
| 31 | Michigan | 8.02% | 2.94% (19) | 2.23% (33) | 2.85% (36) |
| 32 | North Carolina | 7.89% | 2.00% (42) | 2.68% (16) | 3.21% (26) |
| 33 | Idaho | 7.86% | 2.12% (40) | 2.47% (27) | 3.27% (25) |
| 34 | Arizona | 7.79% | 2.26% (36) | 1.62% (38) | 3.91% (10) |
| 35 | Missouri | 7.76% | 2.41% (35) | 2.40% (28) | 2.95% (34) |
| 36 | Georgia | 7.65% | 2.50% (33) | 2.36% (30) | 2.79% (38) |
| 37 | Texas | 7.56% | 3.71% (8) | 0.00% (44) | 3.85% (12) |
| 38 | Alabama | 7.52% | 1.33% (50) | 2.01% (34) | 4.18% (9) |
| 39 | Montana | 7.50% | 3.24% (14) | 3.00% (13) | 1.26% (47) |
| 39 | South Carolina | 7.50% | 2.63% (26) | 2.00% (35) | 2.87% (35) |
| 41 | Nevada | 7.37% | 2.02% (41) | 0.00% (44) | 5.35% (2) |
| 42 | Oklahoma | 7.04% | 1.71% (47) | 1.75% (37) | 3.58% (17) |
| 43 | North Dakota | 6.80% | 2.44% (34) | 0.90% (41) | 3.46% (19) |
| 44 | South Dakota | 6.44% | 2.58% (31) | 0.00% (44) | 3.86% (11) |
| 45 | Delaware | 6.43% | 1.85% (45) | 3.57% (7) | 1.01% (49) |
| 46 | Tennessee | 6.07% | 1.64% (49) | 0.05% (43) | 4.38% (7) |
| 47 | Florida | 6.05% | 2.61% (29) | 0.00% (44) | 3.44% (20) |
| 48 | Wyoming | 5.70% | 3.10% (15) | 0.00% (44) | 2.60% (42) |
| 49 | New Hampshire | 5.63% | 4.51% (4) | 0.15% (42) | 0.97% (50) |
| 50 | Alaska | 4.93% | 3.54% (11) | 0.00% (44) | 1.39% (46) |
“I often describe different types of taxes as different tools in the financial tool chest of government. In my opinion, the fairest tax systems are the ones that use these tools to balance the obligations to pay between different sources of revenue, different types of economic activity, and differently situated taxpayers to arrive at a total tax system that equitably balances tax obligations,” Valerie Sasaki, adjunct faculty member in the School of Business at Portland State University, said in the study. “We as a voting, tax-paying population deserve resilient systems with predictable rules over time. Unfortunately, that does not reduce well to political sound bites or even a single well-reasoned article in the financial press! This has led to a lot of voter confusion about basic financial concepts like the difference between wealth and income. I do think that the future of tax practice will incorporate more discussions of local taxation.”
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Tags: Income Tax, Sales Tax, State and Local Taxes, Taxes
