Fiscal Fact No. 73 The Tax Foundation has released three new datasets that show which congressional districts, counties, and major city areas (MSAs) paid the highest federal individual income taxes in tax year 2004. The nation’s tax burden is the highest in the region surrounding New York City. Carolyn Maloney’s congressional district tops the list in terms of income taxes as a percentage of adjusted gross income (AGI). The area she represents includes part of Manhattan (New York County), which was the top county in the country by that measure. And Stamford-Norwalk, which is just east of New York, was the top major city area. Near Maloney’s district is also the one district that has a negative federal individual income tax liability. Rep. Jose Serrano’s 16th district, which includes parts of the Bronx, actually receives more in refundable credits (such as EITC) than it pays in income taxes. Below is a presentation of the top ten highest-paying jurisdictions in each of the geographic categories. Table 1. Federal Individual Income Tax Burden by Congressional District: Highest-Paying Districts Rank Member (Party) District Federal Income Taxes as a % of AGI Average Income Tax Liability per Return 1 Carolyn Maloney (D) NY – 14 20.8% $32,485 2 Henry Waxman (D) CA – 30 20.5% $27,238 3 Christopher Shays (R) CT – 4 20.3% $28,250 4 Jerrold Nadler (D) NY – 8 19.3% $23,155 5 Nita Lowey (D) NY – 18 18.5% $22,196 6 Mark Kirk (R) IL – 10 18.2% $20,612 7 Pete Sessions (R) TX – 32 17.7% $13,697 8 John Culberson (R) TX – 7 17.5% $15,202 9 Anna Eshoo (D) CA – 14 17.0% $21,671 10 Rodney Frelinghuysen (R) NJ – 11 16.9% $17,001 Note: The federal individual income tax liability equals income tax after credits minus the refundable portions of EITC and the child tax credit. Source: Internal Revenue Service, Tax Foundation View all congressional districts. Table 2. Federal Individual Income Tax Burden by County: Highest-Paying Counties Rank County State Federal Income Taxes as a % of AGI Average Income Tax Liability per Return 1 New York (Manhattan) NY 20.0% $25,875 2 Fairfield CT 19.4% $23,479 3 Teton WY 18.3% $27,015 4 Westchester NY 17.8% $19,411 5 Pitkin CO 17.6% $24,001 6 Collier FL 17.4% $16,966 7 Union SD 17.2% $14,006 8 Marin CA 16.8% $18,365 9 Somerset NJ 16.8% $16,502 10 Morris NJ 16.3% $15,296 Note: The federal individual income tax liability equals income tax after credits minus the refundable portions of EITC and the child tax credit. Source: Internal Revenue Service, Tax Foundation View all counties. Table 3. Federal Individual Income Tax Burden by Major City Area: Highest-Paying Areas Rank Major City Area (MSA) State Federal Income Taxes as a % of AGI Average Tax Liability per Return 1 Stamford – Norwalk CT 22.0% $41,496 2 Naples FL 17.4% $16,849 3 San Francisco CA 16.0% $14,279 4 West Palm Beach – Boca Raton FL 15.1% $11,014 5 Danbury CT 15.0% $12,324 6 Boston MA 14.7% $10,698 7 New York NY 14.7% $9,602 8 Bergen – Passaic NJ 14.4% $10,339 9 Newark NJ 14.4% $10,146 10 San Jose CA 14.2% $11,726 Note: The federal individual income tax liability equals income tax after credits minus the refundable portions of EITC and the child tax credit. Source: Internal Revenue Service, Tax Foundation View all major city areas. Overall, Republican districts have an average effective rate of 11.1%, and districts represented by Democratic members also have an average effective rate of 11.1%. Overall, Democrats tend to represent disproportionately the very low-taxpaying districts, as well as a large share of the very high-taxpaying districts. For example, Democrats represent 29 of the top 50 taxpaying districts, while they also represent 43 of the bottom 50 taxpaying districts. This release is a preview of a Tax Foundation Special Report forthcoming this spring that will present the total federal tax burden by these three geographic units. The Special Report will include estimates of payroll taxes, excise taxes, and corporate income taxes, in addition to individual income taxes, paid at the federal level. This project is designed to give citizens, researchers, media, and federal lawmakers a valuable, detailed illustration of the geographic distribution of the federal tax burden. The income measure employed here is adjusted gross income (AGI), which is the income base for the federal income tax system. The report forthcoming this spring will use a broader income concept that more accurately reflects the proper base when computing an effective rate of all federal taxes. The datasets released today and the final product are courtesy of a compilation of data sources from the IRS, including the public use file (microdata), Statistics of Income (SOI), and SPEC (Stakeholder Partnerships, Education, and Communication), in addition to other federal statistical sources such as the Bureau of Economic Analysis and the Bureau of Labor Statistics.
