Tax Disparities in Blue States and Red States

March 24, 2014

Residents in blue states are paying a lot more in taxes than are residents in red states, says the Washington Post.

A new study from WalletHub determined average tax bills for the typical American family with a median income in a median home in states across the country.

  • The average family pays $7,000 in state and local taxes each year, but as the figure is just an average, the actual amount paid by families varies significantly.
  • On the California side of Lake Tahoe, the average taxpayer pays nearly three times the amount that his counterpart on the Nevada side pays. And just across the Columbia River, a Portland, Oregon, resident pays twice as much as his Vancouver, Washington, neighbor.
  • The lowest state and local taxes are found in Wyoming, at an average of $2,365 per year. Alaska and Nevada also have taxes less than half the average rate.
  • But in nine states (Iowa, New Jersey, Vermont, Wisconsin, Illinois, Connecticut, Nebraska, California and New York), taxpayers are paying at least 25 percent more than the average state and local tax bill. The typical New Yorker earning $65,596 pays over $9,718 in state and local taxes -- that's 40 percent higher than the national average.

States vary in how much they rely on income versus sales taxes for most of their revenue.

  • Oregon relies on the income tax for 67.7 percent of its revenue, Virginia for 54.7 percent of its revenue and New York for 53.3 percent of its revenue.
  • But the states that rely most on sales tax revenue are Washington (60.8 percent), Florida (59.4 percent), South Dakota (58.6 percent) and Tennessee (55.2 percent).

Source: Reid Wilson, "Red State Residents Pay Fewer Taxes Than Blue State Residents," Washington Post, March 18, 2014.

 

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