(H/T – Kevin Fischer)
The Tax Foundation has just released its analysis of Fiscal Year 2009 state and local taxes, and because Wisconsinites pay 11.0% of their incomes in state- and local-level taxes, we had the fourth-worst tax burden in the nation as of last year. That represents an increase of 2.2% from the 10.7% of income Wisconsinites paid in 2008, when Wisconsinites’ tax burden was 6th-worst. By contrast, the average American paid 9.8% of his or her income in state- and local-level taxes in 2009, a drop of 1.2% from the 9.9% of income paid in 2008.
Since the Tax Foundation looks at the taxpayer side of the equation rather than the taxer side, they break down what Wisconsinites pay in-state versus what Wisconsinites pay out-of-state. In fact, in explaining this, they mention Wisconsin as one of their examples – “When Illinois and Massachusetts residents own second homes in nearby Wisconsin or Maine, local governments in Wisconsin and Maine will tally those property tax collections, but we will shift those payments back to the states of the taxpayers.”
With that in mind, let’s take a look at what Wisconsinites paid in in-state taxes. In 2008, we paid a per-capita $3,356 in in-state taxes (10th-highest overall), representing 8.1% of $41,454 in per-capita income (5th-highest overall). In 2009, that increased to $3,418 in per-capita in-state taxes (9th-highest overall), representing 8.5% of $41,4321 in per-capita income (4th-highest overall). That was a $62 increase in per-capita taxes paid (making Wisconsin one of only 17 states where this increased), while per-capita income dropped $1,133, which resulted in an increase of the tax burden in terms of income by 4.7%.
What did the average American see in own-state tax burden? In 2008, the average American paid $3,163 inside their own state, or 7.1% of their $44,294 income. In 2009, the dollar amount dropped to $3,097, but because the income dropped to $42,539, the burden increased to 7.2% of income, or a 0.6% increase.
As for Kevin’s notation that we’re worse than California, we indeed passed them in 2009 in terms of income (i.e. ability to pay). In 2008, California and its local units of government took 8.6% of Californians’ income, and in 2009, that dropped to 8.4%.
In fact, the three states that exacted more from their citizens in terms of income were Connecticut (8.5% of income), New Jersey (8.7% of income) and New York (9.6% of income).
As Kevin said, “Enough.”
Revisions/extensions (3:15 pm 2/26/2011) - I probably should have also mentioned Minnesota’s and Kentucky’s rankings. While Minnesota’s state and local per-capita take from its residents was a bit higher than Wisconsin’s at $3,520 (7th-highest nationally), the fact that each resident has an average income of $45,220 makes the percent-of-income take quite a bit better at 7.8% (6th-highest nationally).
Meanwhile, Kentucky’s state and local takes from each of its residents was a mere $2,227 (37th-highest nationally). Even its 3rd-lowest per-capita income of $32,959 didn’t raise its percent-of-income dramatically, as the 6.8% of income taken by Kentucky was 25th-highest.
I can’t speak for Shoebox, but I’m sure the lower taxes in Kentucky had something to do with his move to a warmer climate.