Which has the lowest taxes, really?

You commonly hear casual political discussion about taxes in one state vs. another state. For example, Massachusetts often gets the nickname “Taxachusetts” because of its high taxes. But which states are really taxed the most? Fortunately, Wikipedia has a summary of the state tax information from the US Census.

Here’s a summary of that, sorted by each resident’s average tax burden (per capita tax):

State Total Taxes ($ thousands) Population Taxes per capita ($)
North Dakota 5739843 756835 7584.01
Vermont 3043152 626088 4860.58
Hawaii 6485563 1425157 4550.77
Connecticut 16231958 3584730 4528.08
Minnesota 24439253 5482435 4457.74
Wyoming 2356323 586555 4017.22
Massachusetts 27012206 6784240 3981.61
New York 78242729 19747183 3962.22
California 151172643 38993940 3876.82
Delaware 3513916 944076 3722.07
New Jersey 31567654 8935421 3532.87
Maryland 19849988 5994983 3311.1
Arkansas 9190212 2977853 3086.19
Illinois 39283051 12839047 3059.65
Maine 4064075 1329453 3056.95
Rhode Island 3196673 1055607 3028.28
West Virginia 5565984 1841053 3023.26
Wisconsin 17019026 5767891 2950.65
Iowa 9189255 3121997 2943.39
New Mexico 6009443 2080328 2888.7
Washington 20644454 7160290 2883.19
Pennsylvania 36110295 12791904 2822.9
Montana 2843465 1032073 2755.1
Michigan 26957337 9917715 2718.1
Kansas 7883960 2906721 2712.32
Nebraska 5086759 1893765 2686.06
Mississippi 7906514 2989390 2644.86
Indiana 17399650 6612768 2631.22
Oregon 10575165 4024634 2627.61
Kentucky 11597983 4424611 2621.24
Nevada 7532989 2883758 2612.21
North Carolina 25061592 10035186 2497.37
Virginia 20536885 8367587 2454.34
Ohio 28297156 11605090 2438.34
Oklahoma 9407393 3907414 2407.58
Idaho 3975445 1652828 2405.24
Colorado 12810632 5448819 2351.08
Utah 6703356 2990632 2241.45
Louisiana 9718755 4668960 2081.57
Arizona 14082100 6817565 2065.56
Alabama 9755439 4853875 2009.82
Texas 55086438 27429639 2008.28
South Carolina 9633031 4894834 1968
Missouri 11956143 6076204 1967.7
South Dakota 1674108 857919 1951.36
Georgia 19723730 10199398 1933.81
Tennessee 12697655 6595056 1925.33
New Hampshire 2487737 1330111 1870.32
Florida 37217759 20244914 1838.38
Alaska 863723 737709 1170.82

(Note that this doesn’t include local taxes.)

As you can see, the top most taxed state is one most people would probably not think of: North Dakota. There, the state government collects $7584.01 for every resident. Taxachusetts ranks 7th.

If your goal is to avoid taxes, you might want to consider packing up and moving to Alaska, with only $1170.82 in taxes per person.

But that’s not the whole story, however. Some states are richer and produce more. These states have a high Gross State Product: a measure of the net economic impact of the state. By comparing the GSP to the taxes collected, we can see how much the state government is sucking up. Another way to look at this is government efficiency: is paying all of those high taxes really bringing a better economy overall?

Here’s a list sorted by taxes as percent of GSP:

State GSP ($ millions) Tax as % of GSP
North Dakota 53686 10.69%
 Vermont 29750 10.23%
 Hawaii 79595 8.15%
 West Virginia 71123 7.83%
 Arkansas 123424 7.45%
 Mississippi 106880 7.40%
 Maine 55137 7.37%
 Minnesota 334780 7.30%
 New Mexico 90810 6.62%
 Montana 45799 6.21%
 Connecticut 262212 6.19%
 California 2448467 6.17%
 Idaho 65202 6.10%
 Kentucky 194578 5.96%
 Wyoming 40170 5.87%
 Michigan 468029 5.76%
 Rhode Island 56323 5.68%
 Wisconsin 300699 5.66%
 Massachusetts 478941 5.64%
 New Jersey 579379 5.45%
 Maryland 365209 5.44%
 New York 1455568 5.38%
 Iowa 171532 5.36%
 Nevada 141204 5.33%
 Delaware 66150 5.31%
 Kansas 149090 5.29%
 Pennsylvania 684313 5.28%
 Indiana 331126 5.25%
 Oklahoma 179835 5.23%
 Illinois 771896 5.09%
 North Carolina 509718 4.92%
 South Carolina 199256 4.83%
 Ohio 599093 4.72%
 Arizona 298204 4.72%
 Alabama 209382 4.66%
 Oregon 228120 4.64%
 Washington 449404 4.59%
 Nebraska 112208 4.53%
 Utah 148225 4.52%
 Virginia 480876 4.27%
 Florida 893189 4.17%
 Missouri 290713 4.11%
 Tennessee 310276 4.09%
 Colorado 318600 4.02%
 Georgia 501241 3.93%
 Louisiana 253517 3.83%
 South Dakota 45415 3.69%
 New Hampshire 71632 3.47%
 Texas 1639375 3.36%
 Alaska 54256 1.59%

(GSP Data via Wikipedia from the US Bureau of Economic Analysis)

North Dakota and Alaska keep their top and bottom positions on this list. But Massachusetts, with its high economic output, drops to the middle of the pack.

Finally, let’s take a look at the ability of people living in the state to actually pay those taxes. We can look at the per-capita income and figure out what percentage is paid out in taxes.

State Per capita
income
Taxes as % of income
North Dakota 33071 22.93%
Vermont 29178 16.66%
Hawaii 29736 15.30%
Minnesota 32638 13.66%
Wyoming 29698 13.53%
Arkansas 22883 13.49%
West Virginia 22714 13.31%
California 30441 12.74%
Mississippi 21036 12.57%
Delaware 30488 12.21%
New Mexico 23683 12.20%
New York 33095 11.97%
Connecticut 39373 11.50%
Kentucky 23684 11.07%
Maine 27978 10.93%
Massachusetts 36593 10.88%
Montana 25989 10.60%
Indiana 25140 10.47%
Wisconsin 28213 10.46%
Iowa 28361 10.38%
Michigan 26613 10.21%
Nevada 25773 10.14%
Illinois 30417 10.06%
Idaho 23938 10.05%
Rhode Island 30830 9.82%
Nebraska 27446 9.79%
Kansas 27870 9.73%
North Carolina 25774 9.69%
Pennsylvania 29220 9.66%
Oklahoma 25229 9.54%
Oregon 27646 9.50%
New Jersey 37288 9.47%
Maryland 36338 9.11%
Washington 31841 9.05%
Ohio 26937 9.05%
Utah 24877 9.01%
Alabama 23606 8.51%
Louisiana 24800 8.39%
Arizona 25715 8.03%
South Carolina 24596 8.00%
Tennessee 24922 7.73%
Georgia 25615 7.55%
Missouri 26126 7.53%
Texas 27125 7.40%
Colorado 32357 7.27%
South Dakota 26959 7.24%
Virginia 34052 7.21%
Florida 26582 6.92%
New Hampshire 34691 5.39%
Alaska 33062 3.54%

No doubt about it, the highly taxed states of North Dakota, Hawaii, and Vermont are at the top of all 3 lists. On the flip side, Alaska and New Hampshire are near the bottom of all 3. Folks in Arkansas, Mississippi, and West Virginia really seem to have a problem: high taxes which are hard to pay and not much to show for it.

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