Data from the 2011 tax year (the year for which the most recent data are available) indicate that:
- 6 states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) don't have an individual income tax. Zero. Zippo. Nada. They come up with $$$s in other ways but not an individual income tax.
- New Hampshire and Tennessee only tax investment income with New Hampshire collecting $63/person and Tennessee collecting $30/person. Okay. That's nothing onerous.
- Among the states with broader income taxes, Arizona collects the least amount, @ $445/capita. Mississippi ($470), Louisiana ($527), and New Mexico ($529). Not terribly onerous but moving in the direction of getting to be a burden.
- New York collected the most of all the states, @ $2,289/capita. Next was was Maryland (@ $1,823 per capita), Connecticut ($1,806), Massachusetts ($1,761), Oregon ($1,426), Minnesota ($1,404), Delaware ($1,360), California ($1,347), New Jersey ($1,204), and Virginia ($1,182). Omigosh! (See below.)
- 91% of state and local tax collections are state-level taxes. Only 13 states collect local income taxes, including Maryland, where local income tax collections represent 30.4% of local tax revenue.
Try the calculator out, then extrapolate the savings over a couple of decades to see what individuals could have put into a retirement savings account but instead went to support government frivolity (defined as "above the average state income tax paid in 2011").
For example, in 2011 the average collection for each state's per capita income taxes--which included wage and salary taxes as well as investment income taxes--was $918/person. Investing $900/year for 20 years assuming a 3.5% return compounded annual would add up to $28.133.35.
Better yet: Subtract that $900/year from what it costs to live in states that have an inidividual income tax and plug that number in to a retirment investment calculator to determined the total amount of real retirement $$$s lost.
Taxpayers end up a very generous lot, are they not?
Let the discussion begin...
To read the Tax Foundation article and try out the calculator, click on the following link:
"Map: State and Local Individual Income Tax Collections Per Capita."