Tax Analysts Blog

Hang On to Your Wallets

Posted on Mar 26, 2014
Wallet Hub is a social media company that allows people to search for and compare financial products and interact with a community interested in making “smarter financial decisions.” Wallet Hub also does all kinds of state and local rankings. It lists the best places to work, the best places to buy chili, the best places to get a divorce, etc. Wallet Hub is now doing state tax rankings.

Now, lots of folks have gotten into the business of doing tax rankings over the years. Business magazines do it. TurboTax does it. Retirement Living does it. Even USA Today does it. The Tax Foundation does it better than anybody. However, because the U.S. Census Bureau releases the data, it’s not too difficult to figure out which states tax what and to subsequently rank them. A fifth grader can do it. But Wallet Hub does not use tax collections to concoct a simple per capita ranking. It uses that data and adjusts for costs of living. Wallet Hub looks at a broad range of taxes, including property, income, sales, fuel, alcohol, and telecommunications taxes. Curiously, it doesn't include cigarette taxes or corporate income or other business taxes in the study.

Still, the outcome will not surprise anyone. The five best states (those with the lowest tax burdens) are Wyoming, Alaska, Nevada, Florida, and South Dakota The five worst are Illinois, Connecticut, Nebraska, California, and New York. I am not sure how Nebraska ended up as the third worst – behind New Jersey and Vermont! In fact, Wallet Hub says Nebraskans average $9,450 a year in state and local taxes. That is about $4,000 less than what the census says. But the rest of the states are the same-old, same-old. Wyoming is good; most of the blue states are bad. As libertarian writer J.D. Tuccille wrote so eloquently in Reason magazine: “California and New York suck for taxpayers.” Wallet Hub’s study does nothing to dispute that.

Read Comments (2)

emsig beobachterMar 27, 2014

Perhaps there are reasons why people live in, quoting Mr. Tucille, places that
"suck for taxpayers" despite their high living costs. Perhaps those reasons are
similar to the reasons that people who have the means eat steak rather than
tuna fish, shop at high end stores rather than WALMART, etc.

Michael HalprinMar 29, 2014

Last year, Texas Governor Perry came to Connecticut to do some job poaching.
Standing tall in his cowboy boots, Mr. Perry was bragging about the low taxes
in Texas. According to the Tax Foundation, the Texas state budget is made up of
40% Federal money, while the Connecticut budget only receives 27% in Federal
money. It's ironic that CT does more to subsidize TX, than visa versa, and Mr.
Perry gets to beat up CT with that advantage.

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