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April 8, 2015

Want Lower Taxes? You Might Want to Move

by Andrew Parker | Publications | TaxBytes
 

Tax season is here and we all want to keep more of the money that we earn. But how much you get to keep could depend on the state you live in and the elected officials who run it.

The Tax Foundation each year ranks the tax burdens for each state. The calculated tax burden is “the percentage of income that taxpayers in each state pay in state and local taxes,” which includes every tax collected (income, sales, property, etc.).

The states with the lowest tax burdens are Wyoming, Alaska, South Dakota, Texas and Louisiana. What should come as no surprise is that it’s the conservative-leaning red states (those run by Republicans) that are doing the best job of keeping taxes low.

And notice that, generally speaking, the more Republican the legislature is, the lower the tax rates.

On the flip side, the states with the highest tax burdens are New York, New Jersey, Connecticut, California and Wisconsin.

These states are liberal-leaning blue states mostly run by Democrats—though that appears to be changing.

Before Scott Walker was elected governor, Wisconsin’s Senate was 55 percent Democrat and the House was 51 percent.  Since Walker took office and got a Republican legislature he has been cutting taxes and spending and making it harder for unions to control the state. We fully expect Wisconsin to move off the bottom-five list soon and become a financially attractive place to live.

So if you want to pay lower taxes, you have three options: Convince your state legislators to reduce them, as many states have done; boot the legislators out of office if they don’t; or consider moving to a state where the elected officials agree that you should be able to keep more of your own money.


 

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