New Jersey Edges out New York for Nation’s Highest State-Local Tax Burden
Source: Tax Foundation

New Jersey taxpayers bear the heaviest state-local tax burden in 2008, and Alaskans have the lightest tax burden, according to a new report from the Tax Foundation.

In Tax Foundation Special Report, No. 163, “State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth,” senior economist Gerald Prante computes each state’s combined state-local tax burden, accounting for taxes paid out of state.

The nation as a whole paid 9.7% of its income in state-local taxes, down from 9.9% in 2007 primarily because income grew faster than tax collections between 2007 and 2008.

New Jersey residents paid 11.8%, topping the charts. New Yorkers were close behind, paying 11.7%, and Connecticut was third at 11.1%. The top ten were rounded out by Maryland (10.8%), Hawaii (10.6%), California (10.5%), Ohio (10.4%), Vermont (10.3%), Wisconsin (10.2%) and Rhode Island (10.2%).

Alaskans pay the least, 6.4 percent in 2008, but Nevada is close at 6.6 percent. In four states the residents pay between 7 and 8 percent of their income in state-local taxes: Wyoming (7.0%), Florida (7.4%), New Hampshire (7.6%) and South Dakota (7.9%). Four other states round out the bottom ten: Tennessee (8.3%), Texas (8.4%), Louisiana (8.4%) and Arizona (8.5%).

+ State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth
+ State and Local Tax Burdens: All States, One Year, 1977-2008

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