The Lansing Journal has partnered with Stacker.com to provide in-depth features that may be of interest to our readers.
By Dom DiFurio
The feared decline in American spending at the onset of the COVID-19 pandemic never fully materialized as stimulus and pandemic aid programs kept consumers buying and sending sales taxes into state and local government coffers.
But while the stimulus-fueled spending spree alleviated concerns about bringing in tax revenue for critical functions in local government, it also helped spur record inflation. Some states are adjusting taxes in response: Utah, for example, moved to reduce individual and corporate income tax rates for 2022.
Stacker examined data from the nonprofit Tax Foundation to see which states have recorded the biggest tax growth in the last four decades. States were ranked by the percentage-point change of each state’s effective tax rate from 1980 to 2022. Ties were broken by the growth from 2021. The overall per capita burden was used if those numbers were the same.
Effective tax rates were calculated by dividing the state and local taxes residents pay by the state’s share of the gross national product. Those taxes include property, sales, income, and other taxes recorded by the Census Bureau’s State and Local Government Finance division.
In 2022, the national average state-local tax burden is 11.2%, unchanged from the year before. “Tax burden” is a term used to describe the effective amount of taxes each person in a state pays its government. “State-local” refers to a combination of state and local tax rates, excluding federal taxes. It can account for income and the portion of corporate taxes shifted to consumers via increased costs or lower wages.
Top 10 tax increases since 1980
#10. Kansas
– Change from 1980: +1.6 percentage points
– Change from 2021: +0.1 percentage points
– State-local effective tax rate 2022: 11.2%
– State-local tax burden per capita: $6,353
#9. Nevada
– Change from 1980: +1.8 percentage points
– Change from 2021: -0.3 percentage points
– State-local effective tax rate 2022: 9.6%
– State-local tax burden per capita: $5,554
#8. Delaware
– Change from 1980: +2.1 percentage points
– Change from 2021: +0.2 percentage points
– State-local effective tax rate 2022: 12.4%
– State-local tax burden per capita: $7,170
#7. California
– Change from 1980: +2.1 percentage points
– Change from 2021: +0.2 percentage points
– State-local effective tax rate 2022: 13.5%
– State-local tax burden per capita: $10,167
#6. Virginia
– Change from 1980: +2.1 percentage points
– Change from 2021: +0.1 percentage points
– State-local effective tax rate 2022: 12.5%
– State-local tax burden per capita: $7,979
#5. Illinois
– Change from 1980: +2.3 percentage points
– Change from 2021: 0.0 percentage points
– State-local effective tax rate 2022: 12.9%
– State-local tax burden per capita: $8,390
#4. New York
– Change from 1980: +2.7 percentage points
– Change from 2021: +0.7 percentage points
– State-local effective tax rate 2022: 15.9%
– State-local tax burden per capita: $12,083
#3. Vermont
– Change from 1980: +2.8 percentage points
– Change from 2021: +0.2 percentage points
– State-local effective tax rate 2022: 13.6%
– State-local tax burden per capita: $7,958
#2. Hawaii
– Change from 1980: +3.1 percentage points
– Change from 2021: +0.2 percentage points
– State-local effective tax rate 2022: 14.1%
– State-local tax burden per capita: $8,410
#1. Connecticut
– Change from 1980: +4.9 percentage points
– Change from 2021: +0.7 percentage points
– State-local effective tax rate 2022: 15.4%
– State-local tax burden per capita: $12,151
