Financial Focus: The 20 Best & Worst Tax States

Guest Post by Anthony Rivieccio

American taxpayers generally agree on what would make for a “fair” tax system on the state and local level, but a new study we conducted shows that no state has such a tax structure.

Our study concludes below on the most and least fair state tax systems.

People surveyed for the study showed a strong preference for a progressive structure, considering a fair state and local tax system one that taxes upper-income households at a higher rate than lower-income ones.

In that regard, our study shows that current state and local tax systems, on average, are extremely unfair, as virtually every state has a regressive state and local tax structure.

The research showed that both “blue” states and “red” states overtaxed the poor and undertaxed the wealthy, relative to what respondents thought was fair.

The wealthy top 1% was most undertaxed in Wyoming, Alaska and South Dakota, while the poor in Washington, Illinois and Florida bore the heaviest tax burden, according to the study.

The middle class was most overtaxed in Arkansas, New York and Hawaii.

To rank the states, we profiled over over 1,000 individuals during Income Tax season, to assess what Americans thought a fair state and local tax system looked like, then compared what respondents thought was fair with data on the real structure of tax systems in all 50 states.

The following below are 10 fairest and 10 least fair tax states, with each one’s standing among all states in terms of its dependence on property taxes, sales and excise taxes, income and other taxes (1 = least dependent).

BEST STATES:

10: Vermont
Dependence on property taxes: 47
Dependence on sales and excise taxes: 14
Dependence on income (personal and corporate taxes): 13
Dependence on other taxes: 15

9: Maryland

Dependence on property taxes: 17
Dependence on sales and excise taxes: 8
Dependence on income (personal and corporate taxes): 45
Dependence on other taxes: 24

8: California

Dependence on property taxes: 21
Dependence on sales and excise taxes: 16
Dependence on income (personal and corporate taxes): 40
Dependence on other taxes: 25

7: Minnesota
Dependence on property taxes: 20
Dependence on sales and excise taxes: 24
Dependence on income (personal and corporate taxes): 37
Dependence on other taxes: 20

6: Virginia
Dependence on property taxes: 31
Dependence on sales and excise taxes: 11
Dependence on income (personal and corporate taxes): 39
Dependence on other taxes: 26

5: Idaho
Dependence on property taxes: 16
Dependence on sales and excise taxes: 28
Dependence on income (personal and corporate taxes): 30
Dependence on other taxes: 29

4: Delaware
Dependence on property taxes: 49
Dependence on sales and excise taxes: 3
Dependence on income (personal and corporate taxes): 38
Dependence on other taxes: 49

3: South Carolina
Dependence on property taxes: 29
Dependence on sales and excise taxes: 27
Dependence on income (personal and corporate taxes): 16
Dependence on other taxes: 32

2: Oregon
Dependence on property taxes: 34
Dependence on sales and excise taxes: 1
Dependence on income (personal and corporate taxes): 46
Dependence on other taxes: 41

1: Montana
Dependence on property taxes: 38
Dependence on sales and excise taxes: 5
Dependence on income (personal and corporate taxes): 23
Dependence on other taxes: 46

WORST STATES:

10. Tennessee
Dependence on property taxes: 12
Dependence on sales and excise taxes: 49
Dependence on income (personal and corporate taxes): 3
Dependence on other taxes: 39

9: Texas
Dependence on property taxes: 45
Dependence on sales and excise taxes: 38
Dependence on income (personal and corporate taxes): N/A
Dependence on other taxes: 40

8: Arizona
Dependence on property taxes: 33
Dependence on sales and excise taxes: 39
Dependence on income (personal and corporate taxes): 7
Dependence on other taxes: 4

7: Mississippi
Dependence on property taxes: 14
Dependence on sales and excise taxes: 40
Dependence on income (personal and corporate taxes): 12
Dependence on other taxes: 21

6: Indiana
Dependence on property taxes: 24
Dependence on sales and excise taxes: 32
Dependence on income (personal and corporate taxes): 26
Dependence on other taxes: 8

5: Florida
Dependence on property taxes: 43
Dependence on sales and excise taxes: 41
Dependence on income (personal and corporate taxes): 2
Dependence on other taxes: 28

4: Illinois
Dependence on property taxes: 44
Dependence on sales and excise taxes: 20
Dependence on income (personal and corporate taxes): 11
Dependence on other taxes: 17

3: Arkansas
Dependence on property taxes: 1
Dependence on sales and excise taxes: 46
Dependence on income (personal and corporate taxes): 28
Dependence on other taxes: 12

2: Hawaii
Dependence on property taxes: 6
Dependence on sales and excise taxes: 43
Dependence on income (personal and corporate taxes): 21
Dependence on other taxes: 14

1: Washington
Dependence on property taxes: 22
Dependence on sales and excise taxes: 50
Dependence on income (personal and corporate taxes): N/A
Dependence on other taxes: 31

Anthony Rivieccio is the founder & The CEO of The Financial Advisors Group, celebrating their 18th year as a fee only financial planning firm specializing in solving one’s financial problems. Anthony has been a recognized financial expert since 1986. He has been seen, heard or read by many national and local media outlets including: Klipingers Personal Finance Magazine, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet Channel 67 TV, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS1010 Radio, The Bronx News newspaper and this publication.
Anthony can be reached at 347.575.5045
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