November 17 2012
State and Local Tax Burdens: New York is the Country’s Heavy-Hitter
Vicki E. Alger
The Tax Foundation recently released its Annual State-Local Tax Burden Ranking. Among its key findings:
- Since 2000, state and local burdens have increased from 9.3 percent to 9.9 percent.
- The residents of New York, New Jersey, and Connecticut paid the highest state-local tax burdens in the nation, paying over 12 percent of their income in state and local taxes.
- Residents of Alaska pay the lowest percentage of income at just 7.0 percent. The next lowest-taxed states were South Dakota, Tennessee, and Louisiana.
But don’t think your free-and-clear just because you don’t live in those states, as the Tax Foundation continues:
Every state’s economic activity is different, as is every state’s tax code. As a result, each varies in their ability to “export their tax burden”—that is, to collect revenue from nonresidents. …
Many states…make a conscious effort to levy taxes specifically on nonresidents, and that effort seems to be accelerating. In fact, many campaigns for tax-raising legislation in the last several years have explicitly advertised the ability to push the burden of a certain tax onto non-voting, nonresident payers as a reason for resident voters to accept the tax.
This beggar-thy-neighbor effort has been mostly legislative, exemplified by a wave of tax hikes on tourism: hotel rooms, rental cars, restaurant meals, and local sales taxes in resort areas. States and localities have also targeted nonresidents with higher property taxes and, in rare cases, higher income taxes. The effort to utilize nonresidents has also been administrative, as departments of revenue have pursued nonresident income tax revenues from individuals and corporations with far more zeal than in years past.
Tax burdens matter because they affect everyone’s financial freedom to make the spending and investment decisions they think are best. Financial freedom also means freedom from dependency—on family members, friends, and government. Those who claim to speak for women all too often are advocating for more money from other people’s pockets to subsidize things women can—and should—earn through their own efforts.
Aside from kissing babies, politicians love to try and kiss up to women by promising them any number of government programs. It won’t cost you anything, they say—except your independence. If independence matters to you, then outdated and punitive tax codes should matter, too. That’s because those codes affect how much of our earnings are taken away, along with decision-making power over how to use those earnings.