Thursday, April 9, 2009

In depth:Most Taxed States

10. Pennsylvania

Population: 12.4 million

Average tax burden per person: $2,223

Residents of Pennsylvania aren't sweating high property taxes like their mid-Atlantic neighbors, but they make up for it in sales tax. The bulk of the state's $2,223-per-person tax burden comes from a $1,234-per-person sales tax. Add in $839 per person in income tax, $169 per person in fuel taxes, as well as high tobacco, utilities and motor vehicle taxes, and you steadily build up to the overall mark.


9. Wyoming

Population: 530,000

Average tax burden per person: $2,357

Wyoming has no individual income tax, no taxes on public utilities and relatively modest property taxes ($526 per person). Sales taxes, however, make up the difference. What's good, at least, is that the state of Wyoming has very low additional taxes on alcoholic beverages and tobacco. If the government is going to hit your wallet, it might as well let you have fun.


8. Washington

Population: 6.6 million

Average tax burden per person: $2,553

Thanks to California, the West Coast has a reputation for heavily taxing businesses. Washington, however, likes to spread the burden around, making it the leading Western state for taxes. There are low property taxes in the state, and no personal income tax, but just try and buy something. Sales taxes--which come out to $2,181 per person--account for 85% of personal taxes paid.


7. Massachusetts

Population: 6.4 million

Average tax burden per person: $2,953

At $12.4 billion, or $1,925 per person, Massachusetts garnishes more in personal income taxes (both at the gross and individual levels) than just about any state in the country. Still, Bay Staters pay very low property tax based on Census figures, though combined with the pinch from sales tax ($929 per person), it's enough to land the state in the top 10.


6. New York

Population: 19.4 million

Average tax burden per person: $3,019

Keep in mind that these numbers cover 2008's tax receipts. Why does that matter? Because with Wall Street crashing and burning since the 2007-2008 tax year, it's impossible to imagine New York State getting $36.5 billion (or $1,876 per person) in individual income tax. It's no wonder Gov. David Patterson has floated proposals to tax such trivial things as soda and candy bars--the state really needs the money.


5. New Jersey

Population: 8.7 million

Average tax burden per person: $3,024

While New Jersey rightly deserves its mantle as one of the nation's most tax-happy states, part of its high tax receipts can be attributed to Jersey residents' high income ($67,000 at the median, second highest in the country).


4. Minnesota

Population: 5.2 million

Average tax burden per person: $3,203

Most states either have high income taxes or high sales taxes, but in Minnesota, residents are treated to the pleasure of both. When average Minnesotans look over their yearly bills, individuals will find $1,495 gone away to pay income tax and $1,429 thanks to sales tax.


3. Connecticut

Population: 3.5 million

Average tax burden per person: $3,596

The Northeast has a reputation for high taxes, and Connecticut doesn't depart from the model. The big hit comes in the form of personal income taxes, which bleed $2,000 per person from Connecticut residences. One contributing factor to that: Connecticut citizens have the third highest personal income ($66,000 per capita) of any state in the country, meaning there's far more to tax.


2. Hawaii

Population: 1.29 million

Average tax burden per person: $3,856

Hawaii, as a tourist-based economy, relies heavily on sales taxes to generate government revenue. There's no property tax in Hawaii, but the receipts from sales tax and selective sales taxes (those measured on specific goods determined individually by the state) are at the level or higher than states like Kentucky or Colorado, which have three to four times the population.


1. Vermont

Population: 620,000

Average tax burden per person: $3,861

If there can be a good thing said about a high individual tax burden in Vermont, it's that the levels of tax are relatively even: personal spending, property taxes and personal income taxes all come out to similar levels at $1,379, $1,004 and $1,306, respectively. So at least your bills draw down your wallet in balance. That's something, right?

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