2014-04-10 / Community

Michigan has 21st highest local-state tax burden

WASHINGTON, DC – Michigan residents shoulder the 21st highest state-local tax burden in the country, according to the annual State-Local Tax Burdens report released by the nonpartisan Tax Foundation. Using the most upto date data available, the report shows that taxpayers in Michigan paid 9.6 percent of their collective incomes in state and local taxes in 2011. The national average was 9.8 percent.

The study’s key findings include:

During the 2011 fiscal year, state-local tax burdens as a share of state incomes decreased on average. This trend was largely driven by the growth of income in all states.

In 2011, the residents of New York, New Jersey, and Connecticut had the highest statelocal tax burdens as a share of income in the nation. In these states, residents have forgone over 11.9 percent of income due to state and local taxes.

Residents of Wyoming paid the lowest percentage of income in 2011 at just 6.9 percent. They replaced Alaska, which had previously been the least-taxed for multiple decades, as the lowestburdened state in the nation. After Wyoming and Alaska, the next lowest-taxed states were South Dakota, Texas, and Louisiana.

State-local tax burdens are very close to one another and slight changes in taxes or income can translate to seemingly dramatic shifts in rank. For example, the twenty mid-ranked states, ranging from Oregon (16) to Georgia (35), only differ in burden by just over one percentage point.

On average, taxpayers pay more to their own state and local governments (73 percent of total burden). Taxes paid within states of residence decreased on average in 2011, while taxes paid to other states increased, leading to a slight decrease in total burden. Some states deviated from these national trends, however.

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