From Wallet Hub, April, 12, 2016 (excerpt)
Only a week remains before Uncle Sam takes his cut from everyone’s earnings this past year. And many taxpayers are already wondering what that haircut on their finances will look like. However, with such a complex and convoluted tax code that’s further complicated by how taxes are imposed on Americans based on their individual household characteristics, it’s hard to tell.
But one simple ratio, “tax burden,” cuts through the confusion and gives a straightforward answer. Not to be confused with tax rates, which fluctuate widely based on an individual’s particular circumstances, tax burden measures the exact portion of the total personal income of residents in a state that are paid toward state and local taxes.
To determine which states are most aggressive at taking their residents’ income, WalletHub’s analysts compared the 50 states across the three tax types that comprise state tax burden — property taxes, individual income taxes, and sales and gross receipts taxes — as a percentage of total personal income in the state. Scroll down for the results, expert commentary and a full description of our methodology.
| 1 |
New York |
13.12% |
4.65% |
4.76% |
3.71% |
| 2 |
Hawaii |
11.86% |
2.13% |
2.78% |
6.95% |
| 3 |
Maine |
11.13% |
4.82% |
2.91% |
3.40% |
| 3 |
Vermont |
11.13% |
5.20% |
2.36% |
3.57% |
| 5 |
Connecticut |
10.91% |
4.39% |
3.49% |
3.03% |
HAWAII – Highest total sales and gross receipts tax as percentage of personal income.
Methodology
In order to identify the states that tax their residents the most and least aggressively, WalletHub’s analysts 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 Fraction of Personal Income
- Individual Income Tax as a Fraction of Personal Income
- Total Sales & Gross Receipts Tax as a Fraction of Personal Income
Sources: Data used to create these rankings were collected from the Tax Policy Center.
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