Iowa ranks 31st in state-local tax burden
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Iowans are paying a smaller share of their collective incomes for state and local taxes than they did in 1990, and the tax burden on Iowa residents has been below the national average for the past 18 years, according to a new study by the Tax Foundation.
Iowans paid 9.3 percent of their incomes in state and local taxes in the fiscal year that ended June 30, making it the No. 31 state for tax burden, according to the foundation’s annual study. By comparison, in fiscal 1990 the Tax Foundation ranked Iowa 10th in the nation in terms of tax burden, with 10.3 percent of residents’ incomes going to state and local taxes when the national average was 9.9 percent.
The nation as a whole paid 9.7 percent of its income in state and local taxes in fiscal 2008, down from 9.9 percent in 2007, primarily because income grew faster than tax collections during that period.
New Jersey topped the tax burden chart at 11.8 percent of income used to pay state and local taxes. The next four highest states were New York (11.7 percent); Connecticut (11.1 percent); Maryland (10.8 percent) and Hawaii (10.6 percent). Alaskans paid the lowest percentage of their incomes (6.4 percent), with Nevada (6.6 percent), Wyoming (7 percent) and Florida (7.4 percent) the next lowest.
In contrast to U.S. Census Bureau figures, which track how much taxes each state collects, the Tax Foundation’s study tracks the total taxes paid by a state’s residents, regardless of where that tax was incurred. In many cases, states’ efforts to charge nonresidents higher taxes than residents have accelerated, the report found.
Total state-local taxes paid per capita in Iowa$3,589
Iowans’ per capita income$38,636
Iowans’ state-local tax burden9.3 percent
National average9.7 percent