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In a current report, the non-public finance web site WalletHub detailed the proportion of revenue excessive, medium and low American earners spend on revenue tax, property taxes and gross sales and excise taxes.
WalletHub got here up with estimates of the state-specific tax burden on residents at three revenue ranges — excessive ($150,000), medium ($50,000) and low ($25,000) — in every of the 50 U.S. states and the District of Columbia. Researchers used information from the Institute on Taxation and Financial Coverage’s 2024 report, which revealed tax burden estimates at seven factors within the state-specific revenue distribution.
With a purpose to examine tax burdens for households on the similar revenue degree throughout the U.S., they match a regression mannequin to estimate the connection between revenue and tax burden for every state and the District of Columbia. They used log transformations to enhance mannequin match and deployed this mannequin to generate predicted tax burdens on the revenue ranges they examined.
The evaluation confirmed that in most states, low- and middle-income households pay a much bigger share of revenue than rich households do. Partly, it’s because many states lack a graduated private revenue tax and depend on consumption taxes.
In 10 of the states with essentially the most favorable tax burden for top earners, their much less prosperous counterparts shell out extra of their revenue on taxes.
See the gallery for the 12 states wherein excessive earners pay the smallest proportion of their revenue on taxes, in keeping with WalletHub.
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