The best and worst states for taxes

MSN Money ^ | Updated Feb. 8, 2007 | Scott McCredie

[Sopater]

Even if you live in the most heavily taxed state, Maine (which collects an average of 13.5% of residents' income), you might not be ready to high-tail it to Alaska, the state with the lowest taxes (6.6%, and the only state that lacks both sales and income taxes), unless you have an affinity for mosquitoes and seemingly endless tundra.

But in certain cases -- say, if you're about to retire and need to make every dollar count -- moving to a less expensive state might make some sense. More on that later. For the rest of us, it's at least enlightening to know how much tax our own states levy. Geography plays a significant part in the amount we pay.

Each state, county and municipality conjures up its own formula for taxing its residents, and thus it costs more -- sometimes a lot more -- to live in one state instead of another.

Besides the variations in local and state taxes, each state differs in what it contributes in federal taxes. That's determined by income. Those who earn more money generally pay a greater percentage of it in federal taxes, so states with a greater percentage of highly paid workers end up paying more. The state that pays the most in combined state, local and federal taxes, per capita, is Connecticut (35.9%), followed by New York (35.1%), New Jersey (34.3%) and Washington (33.7%). Alabama pays the least (27.5%), followed by Alaska (27.9%) and Mississippi (28%).

Tax rates, unsurprisingly, have climbed in the past year. The U.S. average for state and local taxes last year was 10.6%, up from 10.1% in 2005. The average combined state, local and federal tab for 2006 was 31.6%, up from 29.1% in 2005.

[Sopater]

The article is a little bit dated, but I didn't see it in a search.

See Page 2 for a chart.

[Leftism is Mentally Deranged]

Taxes are just the left’s way of doing a transfer of wealth from the haves to the have-nots, leaving a lot along the way in the hands of the burocracy.

[ari-freedom]

A recent poll by the nonpartisan Tax Foundation says that no tax annoys Americans as much as the property tax. One probable reason for this, according to a foundation report, is that property owners often have to write the checks themselves, increasing the likelihood of sticker shock.

taxes should be annoying. if you don't get zonked by a big bill and instead you are nickel and dimed by lots of tiny bills, you won't appreciate just how big the govt is.

[Mrs.Z]

Texas looks good at #32.

BUT it is #12 on property taxes, and (not listed) at the top of the list for property insurance.

The hidden costs do count.

[Lancey Howard]

No surprise that most of the highest taxing states are Democrat pisspots.

[Clemenza]

New Jersey (34.3%)

We're #3! We get the bronze, yet are STILL considered a bargain by New Yorkers!

[Squantos]

Taxes by state
State	Gasoline*	Cigarettes	Retail sales**	All state, local taxes***	Rank		All federal, state, local taxes***	Rank
Alabama	20.3	$0.42	4%	8.8%	46		27.5%	50
Alaska	8	$1.80		6.6%	50		27.9%	49
Arizona	19	$2.00	5.6	10.1%	32		29.9%	29
Arkansas	21.8	$0.59	6	10.3%	27		29.1%	40
California	40.1	$0.87	7.25	10.9%	15		32.7%	9
Colorado	22	$0.84	2.9	9.8%	38		30.7%	23
Connecticut	40.5	$1.51	6	11.3%	9		35.9%	1
Delaware	23	$0.55		8.4%	48		29.7%	33
Florida	31.9	$0.34	6	9.7%	39		31.0%	21
Georgia	21.3	$0.37	4	10.4%	25		30.6%	25
Hawaii	31.8	$1.60	4#	11.7%	5		31.2%	17
Idaho	25	$0.57	6	10.2%	31		29.0%	42
Illinois	32.5	$0.98	6.25	10.9%	14		32.7%	10
Indiana	26.6	$0.56	6	11.0%	12		30.7%	24
Iowa	22	$0.36	5	10.4%	26		29.4%	36
Kansas	25	$0.79	5.3	10.7%	18		30.5%	26
Kentucky	18.5	$0.30	6	10.7%	20		29.8%	31
Louisiana	20	$0.36	4	11.0%	11		29.2%	37
Maine	28.3	$2.00	5	13.5%	1		33.1%	7
Maryland	23.5	$1.00	5	10.7%	19		32.0%	13
Massachusetts	23.5	$1.51	5	10.3%	28		33.4%	6
Michigan	30.8	$2.00	6	10.8%	16		31.1%	19
Minnesota	22	$1.49	6.5	11.9%	4		33.6%	5
Mississippi	18.8	$0.18	7	10.2%	29		28.0%	48
Missouri	17.6	$0.17	4.225	9.9%	34		29.4%	35
Montana	27.8	$1.70		9.5%	42		29.0%	43
Nebraska	28	$0.64	5.5	11.6%	6		30.9%	22
Nevada	32.5	$0.80	6.5	9.5%	43		31.6%	14
New Hampshire	19.6	$0.80		7.3%	49		29.2%	39
New Jersey	14.5	$2.58	7	10.8%	17		34.3%	3
New Mexico	18	$0.91	5	9.9%	36		28.5%	45
New York	41.7	$1.50	4	12.9%	2		35.1%	2
North Carolina	30.2	$0.35	4.5	10.5%	23		30.3%	27
North Dakota	23	$0.44	5	9.8%	37		29.8%	30
Ohio	28	$1.25	5.5	12.0%	3		31.3%	16
Oklahoma	17	$1.03	4.5	9.6%	40		28.2%	47
Oregon	24.9	$1.18		9.9%	35		30.2%	28
Pennsylvania	32.3	$1.35	6	10.4%	24		31.2%	18
Rhode Island	31	$2.46	7	11.5%	8		33.0%	8
South Carolina	16.8	$0.07	5	10.2%	30		29.2%	38
South Dakota	24	$1.53	4	9.2%	45		28.9%	44
Tennessee	21.4	$0.20	7	8.6%	47		28.2%	46
Texas	20	$1.41	6.25	9.4%	44		29.7%	32
Utah	24.5	$0.70	4.75	10.5%	22		29.5%	34
Vermont	20	$1.79	6	11.1%	10		31.3%	15
Virginia	19.2	$0.30	5	9.5%	41		31.1%	20
Washington	34	$2.03	6.5	10.9%	13		33.7%	4
West Virginia	27	$0.55	6	10.6%	21		29.1%	41
Wisconsin	32.9	$0.77	5	11.6%	7		32.2%	12
Wyoming	14	$0.60	4	10.1%	33		32.4%	11
District of Columbia	20	$1.00	5.75	12.8%			35.1%

*Additional federal levy is 18.4 cents nationwide

**Base state rate (local tax may be higher)

***Average, as percentage of income

#General excise tax instead of sales tax

[ari-freedom]

Corzine wants new jersey to be #1!

[So Cal Rocket]

Yup... every state ranked 1-10 (highest tax) voted for Kerry in ‘04

Every state ranked 41-50 (lowest tax) voted for Bush in ‘04.

Without exception

[Clemenza]

He doesn’t want us to be merely Sicily on the Hudson. He wants us to be Nigeria on the Hudson (corruption wise).

[mtbopfuyn]

two people making the same salary and living in the same neighborhood, pay different amounts in taxes

I can attest to that. My house is nearly 50 years old vs. same size fairly new house on twice the lot size across the road yet I pay 4 times ***MORE*** property tax.

[Captain Peter Blood]

The only way out is to leave the country for a nice Island in the Caribbean.

[Muleteam1]

<>>Texas looks good at #32.

BUT it is #12 on property taxes<<

Comparing State to State taxes is very misleading. My particular west Texas county property taxes (almost $0.75 per $100 of appraisal value) and sales taxes (8.2%) would not fare well in most counties in America. Some Texas counties have total property tax rates of as little as $0.23 while others have rates that approach $1.00 for every $100 of appraised value.

[wideminded]

I have trouble believing that Washington State, which has sales tax but no income tax ranks #13, while Oregon with an income tax but no sales tax ranks #35.

Another problem with the chart is that it does not clearly indicate the average percentage of income tax for each state.

Also, how does it make sense that different states have a different percentage of federal tax? (Unless the chart is accounting for the differential income levels between states, which is irrelevant for the person deciding which state to move to.)

[Blood of Tyrants]

Tennessee is #46! Woohoo! If the ‘Rats had been able to force through an unconstitutional income tax (as decide by no less than THREE Tennessee Supreme Courts), our taxes would be far up the list, probably within the top 10.

[Squantos]

Crazy clear ain’t it......:o)

Stay safe !

[goodnesswins]

I think they added in the 9% INCOME tax in Oregon.....we’re moving to Oregon FROM Washington soon....so I was paying particular attention...

[Blood of Tyrants]

Before Connecticut levied an income tax in the early 90’s, they ranked way down in the 40’s. Now they are the most heavily taxed state in the union.

[Myrddin]

Moving from California(9) to Idaho(42) saved me a bundle in taxes. Other costs of living are lower too. Voting with my feet paid off. It was the anti-gun laws, severe traffic and overcrowded everything that induced me to make the move. The tax savings was a bonus.

[LiveFreeOrDie2001]

Super handy - bookmarking!

[j_tull]

Since this article was published, CT has added an ADDITIONAL 7.5% Gross Reciepts Tax on ALL petroleum products. Thats in addition to state sales tax and per/gallon gasoline taxes. Its unclear how the local taxes are figured for the purposes of this article. The crappy little town I live in charges me $550 per year for the privilege of parking my two 5 year old 100k+ miles cars in my driveway. I hate this F’n place.

[puppypusher]

I see the Not So great state of Connecticut is ranked number 9.I guess we get what we pay for because our cities are loaded with illegal aliens who are surging here without delay.

I fear for this country.

[Cobra64]

No surprise that most of the highest taxing states are Democrat pisspots.

Yup. And they want to push their cancer onto the rest of us.

[HHFi]

This can’t possibly be correct. It shows Arkansas way down at #40 in total tax burden and Massachusetts way up at #6. But from reading FR, we all know that Mike Huckabee is a big-government, tax-hiking socialist, while Mitt Romney is a pure, tax-cutting Reaganesque conservative. Obviously, the chart must be wrong.

[puppypusher]

Don’t forget the Real Estate transaction tax that they put on homeowners when the sell their home.Thats a good chunk of change.

[Hop A Long Cassidy]

>>>Texas looks good at #32.
>>>BUT it is #12 on property taxes, and (not listed) at the >>>top of the list for property insurance.
>>>The hidden costs do count.

I agree. Insurance for your car and house should be considered as just another tax, as their rates depend largely on the population nearby. New Jersey is sky high in car insurance because of the car theft. Florida has sky high property insurance because of the fraud.

[ASOC]

Same in Alaska.

Not only the winters long, brutally , or, lethally cold, everything costs 50 to 70% more than the L48.

So, don’t move to Alaska, stay where you are or, perhaps, move to Texas - it’s a big State and can always use more folks.....

[crusty old prospector]

Don’t live on the coast. Cheaper insurance.

[Jack Black]

I agree it seems like a very poorly designed chart.
State income tax is a big deal, especially if you are working. The cigarette tax may not be.

[Muleteam1]

Not sure you were replying to me but our winters here on the Texas High Plains can be pretty brutal as well. However, I'm sure the duration of our cold weather can't compare to that in Alaska.

The best part about Texas is that property tax rates vary so much from county to county. Having homes in both Texas and Mexico, my family is now trying to decide whether or not to consolidate our properties in a less tax-crazy Texas county or just stay in New Mexico where taxes are reasonable Statewide.

[ASOC]

Just post’n.

I left AZ years ago when the Old Farts started moving in and demanding everything for free/reduced cost, etc, etc. Oh, and no taxes....

I live in AK, two brothers moved to TX, one sister in NV.....

Pretty soon be no place where the working are not taxed to death to suppoet the “pour & Starv’n “ (HT to Kim d T)

[Sopater]

I sure miss Idaho...

[Muleteam1]

The sometimes extreme weather on the High Plains of Texas is perhaps not so inviting as many places in Arizona so most of the elderly folks who are still here were born here. Similar to many of the small towns in the Texas High Plains, this town has not increased in population in the last forty years. Many of the homes have, or have had in the near past, wheel chair ramps at their front doors yet the schools and the parks are still expanding and taxes keep going up. What has happened here is that most of the original Anglo families now reside at the cemetery and their children have left the area for jobs outside of farming. Younger illegal families with many children have replaced the original families and the culture has changed dramatically. If anyone seeks to examine the future of the Anglo-American small-family culture, one has only to look here. Although I was a biologist for many years and understand what is happening, it doesn’t take a scientist or Nostradamus to do the math or predict the future.