NCPA - National Center for Policy Analysis

State Taxes Rose Last Year

October 12, 2000

Residents of Connecticut are subject to the highest state taxes in the land, while taxpayers in New Hampshire pay the lowest on a per capita basis. A new report from the Census Bureau also shows that state taxes went up an average of 5 percent in 1999.

In releasing the comparisons, Census officials cautioned that the raw figures alone don't always tell the entire story. Taxes are low in some states because cities and towns perform more services -- and tax for them. Also, per capita taxes might be high in some states simply because their citizens earn more.

  • For example, in high-income Connecticut, residents pay an average of $2,932.21 -- with Delaware, Hawaii, Minnesota and Massachusetts rounding out the top five of the states with the heaviest taxes.
  • But Delaware performs many functions which are left to localities in many states.
  • At $891.49 per person, New Hampshire has by far the lowest state taxes in the nation -- along with South Dakota, Texas, Tennessee and Louisiana.
  • Nationally, state taxes averaged $1,835.27 in 1999 -- and states reaped a total of $499.5 billion.

Of that amount, individual state income taxes made up $172.3 billion -- or $633 per person.

Experts say New Hampshire's modest figure is somewhat misleading, since more than 75 percent of the taxes that state's residents pay each year are local levies.

Connecticut's high figure reflects the fact that per capita income there is more than $39,000 -- the highest in the nation. The state has also structured its tax system to hit the rich the hardest.

Source: Associated Press, "Census: N.H. Has Lowest State Taxes," Washington Times, October 12, 2000.

 

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