Tuesday, April 07, 2009
Most Americans grumble about the taxes they pay to the federal government, but for many, state taxes are at least as burdensome. A recent Census Department release of tax revenue by state for the years 2007 and 2008 reveals that 2008 saw a dramatic hike in individual taxes on American citizens. The majority of this increase came in the form of increased income tax, which totaled $280.7 billion, up 5.1% from the previous year. General sales taxes generated $240.6 billion nationally, up .9% from the year before. While taxes on the individual citizens soared in 2008, corporate taxes saw a noticeable decline from 2007 rates. Total tax revenue from corporations was only $58.1 billion nationwide, down 2.5%.
Of the top 10 highest taxed states, four generate the majority of their revenue through personal income tax. The two largest states to benefit from this in the 2008 fiscal year were Massachusetts and New York, which averaged $1,925, and $1,876 per-person respectively. Some states, like Hawaii and Wyoming, incorporate higher sales tax than both income and property tax combined. In this way, the second heaviest taxed state, Hawaii, shifts the burden to its high volume of out-of-state visitors. Unfortunately for Hawaii and many other states that favor sales tax, current economic conditions have caused Americans to spend less and save more. The national savings rate is now up to 5%, the highest it has been in 13 years. This may mean that we will see a shift in state tax strategy amidst the ongoing financial crisis.
-Tyler Schenk-Wasson
Where Americans Are Taxed Most (by Matt Woolsey, Forbes)
State Tax Collections Reach Nearly $782 Billion in 2008 (U.S. Census Bureau)
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