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The Center Square [By J.D. Davidson] –
With tax day approaching, a new report showed Tennesseans carry the fourth-lowest tax burden of any state in the nation.
WalletHub, a person finance website, annually releases its tax burden by state report that determines which states tax residents more aggressively than others. The report compared property taxes, individual income taxes, and sales and excise taxes as a share of personal income.
WalletHub Finance Writer Adam McCann said the tax burden ratio is a simple way to evaluate each state, rather than tax rates which can vary based on a person’s circumstance.
Tennessee’s fourth-lowest tax burden amounted to 6.22% of personal income in the state. The majority of the tax burden, according to WalletHub analyst Jill Gonzalez, comes in sales and excise tax, which at 4.54%, is the seventh highest in the country.
“The property tax burden is the second lowest at just 1.66% of personal income, and the individual income tax burden is also one of the lowest nationwide,” Gonzalez said.
Some experts believe the relationship between state tax burden plays a role in economic growth.
“Here is a simple answer, the less state tax burden will drive the state economy. Corporations seek state tax incentives when developing long-term strategies for where to locate new facilities such as plants and offices,” said Joseph Krupka, professor at Florida State University-Panama City. “Reduced corporation and real estate tax burdens along with a favorable personal income tax for their employees are the two keys.”
Also, the report showed red states, based on how they voted in the 2020 presidential election, had a lower tax burden than blue states.
New York had the highest tax burden at 12.47%, followed by Hawaii, Maine, Vermont and Connecticut. Alaska’s burden of 5.06% was the lowest, followed by Delaware, New Hampshire, Tennessee and Florida.
One Response
If property taxes are so low why has mine tripled in the last 9 years?? Just to say property taxes are low based upon a survey of the entire U.S. does not address the issue that in general property taxes just wrong. I understand its to support schools, street maintenance and city operations. Question: Why should someone with zero children EVER in school have to pay for other peoples children. Why does ANYONE have to pay for Illegal children? Let those who have kids pay tax directly to THEIR schools and leave the rest of us alone. People living in rentals in a cities area should be treated the same way. That includes helping pay for city payroll and operations.