New Data Shows Dramatic Increase In State Tax Burden

by Mike Godfrey, Tax-News.com, Washington

13 February 2006

Newly released data from the US Census Department has shown that the state tax burden grew by an average of 41% in the ten years from 1994 to 2004.

The data, which excludes local and federal taxes, shows that individual tax burdens increased in 43 states over the ten-year period, even when adjusted for inflation.

The highest tax burden was to be found in Hawaii, whose residents paid average of $3,050 to the state government last year. Wyoming, Connecticut, Minnesota and Delaware completed the top five.

Meanwhile, Texans paid the least taxes, at an average of $1,368 per person, followed by residents of South Dakota, Colorado, New Hampshire and Alabama.

Residents of New Hampshire saw their taxes grow the fastest in the ten years to 2004, although the state remains relatively lightly taxed at $1,544 per person.

Alaska saw the sharpest drop as its state tax receipts fell by 1% to $2,035 per person. Alaska derives much of its revenue from the oil industry.

Rising education, coupled with growing medicaid costs and the need to replenish state coffers during the economic downturn are seen as the primary causes for general increase in the tax burden at state level.

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