Tax Burden, by state (sales, home, buy)

[Trainwreck20]

There has been many comments regarding property taxes vs. income taxes. A list of estimate 2006 tax burden (as calculated by Retirementliving.com) is listed below:

Attachment 1242 (PDF)

This says that it includes:

• Sales Tax
• Fuel Tax
• Cigarette Tax
• State Income Tax
• Federal Income Tax
• Property Tax

Base on taxes paid per dollar earned, Texas is 44th. Based on total taxes paid per capita, Texas is 34th. This is apparently due to the almost exactly 'averge' income earned in Texas (26th out of 51 counting DC).

Interestingly, Alaska has the lowest tax burden, mainly due to taxes on oil that are 'exported' to the states that buy the oil. Number two and three for 'exporting' of taxes are Texas and New Mexico (oil and natural gas fees). The largest 'importers' of tax burden are California, Pennsylvania, and New York.

Note that the tax burden listed here is an aggregate average. In Texas, if you own valuable property and earn a lower than average income, your taxes will be higher, whereas a high earner with modest property will lower their tax burden. Similarly, states with low property tax and high income tax will be the reverse.

[cdelena]

They say ‘there are lies, damned lies, and statistics’…

Don't be fooled by statistics which can easily make any case you want. Not only do most Texas cities have a relatively high sales tax but the killer is property taxes for home owners. Although it will look OK when measured per capita or as a percentage of income, these are gross measures. What hits closer to home is the annual property tax as a percentage of home value... at 2.5 to 3.5% it is number ONE in the country. Worse than that it can increase 10% a year.

[Trainwreck20]

Yeah, I know statistics can be twisted, but the sales tax and property tax are figured into the rankings. So although there is a very high property tax, the overall tax burden is really not that high. Anyone who lives in a dwelling pays property tax, either directly or through the landlord. Everyone pretty much pays sales tax, too. And although the property tax can increase by 10% per year, the overall tax burden has stayed in the middling to lower end of the rankings.

[LastDallasNative]

According to an article in a business newspaper, emphasis on a state income tax instead of a state sales tax in California has hurt middle class taxpayers. Apparently, according to this article, many illegals work off the books in California and don't pay state income taxes. This shifts higher taxes to the middle class citizens and legal immigrants.

But here in Texas, everybody has to pay a state sales tax. Usually sales taxes are viewed as a burden to the poor, but in this case it is a relief to the middle class.