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Americans back home are paying less state taxes

As expats you (probably) don’t pay any State Taxes. But you might still want to know what’s happening back home, what with all the talk about States being in dire financial state.

The Tax Foundation says that combined state and local tax burdens fell slightly in fiscal year 2009. It’s the first drop in the state tax burden since 2000.

For each state, the Washington, D.C.-based nonpartisan organization calcu­lates the total amount paid by state residents in taxes, then divides those taxes by the state’s total income to compute a “tax burden.” The calculation is based not only on the most recent year’s data, but also on earlier years because official tax and income data are periodically revised.

The methodology provides the answer to the question, “What percentage of their income are the residents of this state paying in state and local taxes?”

The answers for each state are shown in the map below. You can click the image to get a slightly larger view, or check out page 4 of the study (PDF format) for an even bigger view, as well as a table version on page 3.

State_tax_burdens_map_Tax-Foundation_022311

Largest, smallest taxpayer burdens: In 2009, residents of New Jersey, New York and Connecticut paid the highest state and local tax burdens in the nation.

They’re the only three states where taxpayers give up 12 percent or more of their income in state and local taxes. That’s a full percentage point above the next highest state, Wisconsin.

Rhode Island, California, Minnesota, Vermont, Maine and Pennsylvania round out the top 10.

Alaska is at the other end of the tax burden scale. Alaskans are consistently the least taxed in the nation and that held true in 2009, when Last Frontier residents paid just 6.3 percent of their income in state and local taxes.

The next lowest state, over a full percentage point higher, is Nevada at 7.5 percent.

In five states — Nevada, South Dakota, Tennessee, Wyoming and Texas — the residents pay between 7 and 8 percent of their income in state-local taxes. Four other states round out the bottom 10: New Hampshire, South Carolina, Louisiana and New Mexico.


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