Americans paid 9.8% of income in state and local taxes in 2011

April 02, 2014

Americans paid 9.8% of income in state and local taxes in 2011

Annual Release of State-Local Tax Burdens Report

Washington, DC (April 2, 2014)—Americans paid 9.8% of their collective income in state and local taxes in 2011, according to the latestAnnual State-Local Tax Burdens report, released this morning by the nonpartisan Tax Foundation. Using the most up-to-date data available, the report illustrates the state-local tax burden on taxpayers in each of the 50 states in 2011.

New Yorkers had the highest burden, paying 12.6% of their collective income in state and local taxes. New Jersey (12.3%) and Connecticut (11.9%) came in 2nd and 3rd, respectively.

On the other end of the spectrum, Wyoming (6.9%), Alaska (7.0%), and South Dakota (7.1%) have the lowest burdens.

The study’s key findings include:

  • During the 2011 fiscal year, state-local tax burdens as a share of state incomes decreased on average. This trend was largely driven by the growth of income in all states.
  • In 2011, the residents of New York, New Jersey, and Connecticut had the highest state-local tax burdens as a share of income in the nation. In these states, residents have forgone over 11.9 percent of income due to state and local taxes.
  • Residents of Wyoming paid the lowest percentage of income in 2011 at just 6.9 percent. They replaced Alaska, which had previously been the least-taxed for multiple decades, as the lowest-burdened state in the nation. After Wyoming and Alaska, the next lowest-taxed states were South Dakota, Texas, and Louisiana.
  • State-local tax burdens are very close to one another and slight changes in taxes or income can translate to seemingly dramatic shifts in rank. For example, the twenty mid-ranked states, ranging from Oregon (16th) to Georgia (35th), only differ in burden by just over one percentage point.
  • On average, taxpayers pay more to their own state and local governments (73 percent of total burden). Taxes paid within states of residence decreased on average in 2011, while taxes paid to other states increased, leading to a slight decrease in total burden. Some states deviated from these national trends, however.

The report examines burden trends over time and takes into account what taxpayers pay to other states in addition to their own, offering a more accurate picture of the true tax burden borne by residents.

“States have different tax burdens, just as they have different levels of services. For Americans to make informed judgments about benefits and costs of state-local government, the costs need to be known.” said Tax Foundation economist Liz Malm. “This annual estimate of how much residents pay in state-local taxes helps inform that discussion.”

Report: Annual State-Local Tax Burden Rankings FY 2011

Methodology: Tax Foundation State-Local Tax Burden Estimates: An Overview of Methodology

Media Contact:
Richard Borean
Manager of Communications
Tax Foundation

The Tax Foundation is the nation’s leading independent tax policy research organization. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and local levels


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