A chart by the Tax Foundation showing the nation's tax burdens by state. Photo: Tax Foundation
Massachusetts residents shoulder the 11th highest state-local tax burden in the country, according to a report released Wednesday by the Tax Foundation, a nonpartisan tax policy research organization.
Using the recent data, the Annual State-Local Tax Burdens report shows that taxpayers in Massachusetts paid 10.3 percent of their collective incomes in state and local taxes in 2011. The national average was 9.8 percent, according to the foundation.
The study also found that:
During the 2011 fiscal year, state-local tax burdens as a share of state incomes decreased on average. This trend was largely driven by the growth of income in all states.
In 2011, the residents of New York, New Jersey, and Connecticut had the highest state-local tax burdens as a share of income in the nation. In these states, residents have forgone over 11.9 percent of income due to state and local taxes.
Residents of Wyoming paid the lowest percentage of income in 2011 at just 6.9 percent. They replaced Alaska, which had previously been the least-taxed for multiple decades, as the lowest-burdened state in the nation. After Wyoming and Alaska, the next lowest-taxed states were South Dakota, Texas, and Louisiana.
State-local tax burdens are very close to one another and slight changes in taxes or income can translate to seemingly dramatic shifts in rank. For example, the twenty mid-ranked states, ranging from Oregon (16th) to Georgia (35th), only differ in burden by just over one percentage point.
On average, taxpayers pay more to their own state and local governments (73 percent of total burden). Taxes paid within states of residence decreased on average in 2011, while taxes paid to other states increased, leading to a slight decrease in total burden. Some states deviated from these national trends.
The report examines burden trends over time and takes into account what taxpayers pay to other states in addition to their own.
“States have different tax burdens, just as they have different levels of services. For Americans to make informed judgments about benefits and costs of state-local government, the costs need to be known.” said Tax Foundation economist Liz Malm.
“This annual estimate of how much residents pay in state-local taxes helps inform that discussion.”