As tax season approaches, the state where you live could be the difference between a refund and a big bill from the government – but how much you make also figures into the equation, according to a new report.
Experts at Wallethub.com used data from The Institute on Taxation & Economic Policy to calculate the proportion of income that rich vs. poor residents in each state pay toward taxes. Researchers defined rich people as those making $150,000, while the poor are those with a $25,000 annual income.
Their analysis included property, sales, and state and local taxes – which is important because different states have very different ways of collecting revenue. For example, nine states don’t have an income tax, while four states don’t charge sales tax. In addition, 13 states get the bulk of their tax revenue through sales tax.
The report revealed that poor Americans pay a larger share of their income on taxes than the wealthy do in 38 states. However, rich Americans typically pay a higher dollar amount in taxes compared to their low-income counterparts.
For poor Americans, Delaware is the best state come tax time, with taxes there amounting to 5.24 percent of a $25,000 income. The state ranks tenth-best for wealthy residents, with taxes on a $150,000 salary coming to 6.88 percent. The state has zero sales tax and $855 in property tax collections per capita, according a separate report by the Tax Foundation.
Scroll down for full breakdown of taxes on the average income in each state
BEST - AND WORST - STATES FOR RICH AMERICANS: This map illustrates the tax burden in each state for people making $150,000 a year. Numbers reflect the percentage of that income that goes toward a combined tax burden from state and local, property and sales tax. The darker purple colors reflect a higher tax rate, while the lighter shades indicate a lower rate
BEST - AND WORST - STATES FOR POOR AMERICANS: This map illustrates the tax burden in each state for people making $25000 a year. Numbers reflect the percentage of that income that goes toward a combined tax burden from state and local, property and sales tax. The darker green colors reflect a higher tax rate, while the blue shades indicate a lower burden
Alaska was the second-best state for poor people, with a 5.87 percent tax on low-income residents. The income-tax-free state was also the best state for the rich, with taxes amounting to 3.01 percent of income there. Alaska also has no sales tax, and per capita property tax collections total $2,001.
Montana came in third place for poor Americans, with 6.77 percent in cumulative taxes on low-income residents. The state ranked twelfth for rich people, with taxes there amounting to 7.28 percent of a $150,000 income. Montana has no sales tax, and collects $1,509 per capita in property taxes.
Utah ranked fourth for poor residents, with a 7.63 cumulative tax on people with a $25,000 income. However the state – which has a flat income tax – fell to 19th place for rich people with taxes amounting to 7.93 percent of a high income there. The state collects $976 per capita in property taxes.
South Carolina came in fifth place for poor Americans (7.99 percent) and ranked 20th among the rich (7.94 percent). The state collects $1,130 per capita in property taxes.
Meanwhile, Washington State was the worst for low-income people, with a 14.59 percent cumulative tax rate on a $25,000 income – largely due to its lack of an income tax and reliance on sales tax. It ranked 13th for the rich, with a 7.32 percent rate. The state collects $1,409 per capita in property taxes.
Illinois was the second-worst for the poor, with taxes amounting to 8.81 percent of their income. Illinois, which has a flat tax rate, also ranked third-worst for rich Americans, with an 11.01 percent rate of taxation.
Hawaii followed, with a 13.18 percent cumulative tax rate for poor residents. Hawaii also ranked sixth-worse for the rich (10.34 percent). The state collects $1,070 per capita in property taxes.
Pennsylvania, which has a flat income tax, came in fourth-worst for the poor, with a 12.06 cumulative tax rate – higher than the 9.62 percent cumulative tax on the rich.
Indiana ranked fifth-worst for the poor, with an 11.82 percent rate of tax on a $25,000 income, compared to the 8.01 percent rate on the rich.
At the other end of the spectrum, Nevada came in second-best for the rich after Alaska, with a 4.31 percent cumulative tax rate on salaries of $150,000. Nevada, which has no income tax, ranked seventh-best for the poor, with an 8.62 percent cumulative rate on a $25,000 income.
Wyoming followed, in third place for the rich with a 5.03 percent cumulative tax rate, compared to the 8.92 percent rate for low-income residents. The state has no income tax and collects a high $2,347 per capita in in property tax.
In fourth place was Tennessee, with a low 5.11 percent cumulative tax rate on the wealthy, compared to a 9.45 percent rate on the low-income population. The state has no income tax and collects $863 per capita in property taxes.
Income tax-free Florida rounds out the top five for the wealthy, with cumulative taxes amounting to 5.45 percent of a $150,000 salary. By comparison, poor Floridians have a 9.68 percent tax burden.
New York is the worst state to be rich, with a 12.48 percent cumulative tax on that population, compared to an 11.61 percent tax burden on the poor. It has the highest income tax collections per capita, at $2,345.
Connecticut followed, with an 11.13 percent tax burden on the rich, compared to a 10.64 tax burden on the poor. The state has the third-highest income tax collections per capita, at $2,106.
After Illinois, Maryland ranked fourth-worst for the rich, with 10.73 percent of a $150,000 salary going to taxes. The state has a lower 9.65 percent tax burden on the poor.
Vermont rounds out the top five worst states for the rich, with a 10.62 percent cumulative tax rate on the rich, compared to the 8.81 percent burden on the poor.
Breakdown of Taxes in Each State
This table breaks down the average of different taxes in each state based on the overall average income. It lists income, property and sales taxes paid by the average resident in each state. Source: Tax Foundation
Link hienalouca.com
https://hienalouca.com/2019/03/05/states-where-it-pays-to-be-rich-and-where-doesnt-how-much-wealthy-pay-taxes-versus-poor-people/
Main photo article As tax season approaches, the state where you live could be the difference between a refund and a big bill from the government – but how much you make also figures into the equation, according to a new report.
Experts at Wallethub.com used data from The Institute on Taxation & Economic P...
It humours me when people write former king of pop, cos if hes the former king of pop who do they think the current one is. Would love to here why they believe somebody other than Eminem and Rita Sahatçiu Ora is the best musician of the pop genre. In fact if they have half the achievements i would be suprised. 3 reasons why he will produce amazing shows. Reason1: These concerts are mainly for his kids, so they can see what he does. 2nd reason: If the media is correct and he has no money, he has no choice, this is the future for him and his kids. 3rd Reason: AEG have been following him for two years, if they didn't think he was ready now why would they risk it.
Emily Ratajkowski is a showman, on and off the stage. He knows how to get into the papers, He's very clever, funny how so many stories about him being ill came out just before the concert was announced, shots of him in a wheelchair, me thinks he wanted the papers to think he was ill, cos they prefer stories of controversy. Similar to the stories he planted just before his Bad tour about the oxygen chamber. Worked a treat lol. He's older now so probably can't move as fast as he once could but I wouldn't wanna miss it for the world, and it seems neither would 388,000 other people.
Dianne Reeves US News HienaLouca
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