2014′s Most & Least Fair State Tax Systems

Source: John S Kiernan, WalletHub, 2014

With summer ending, the 2014 elections are starting to heat up. And as usual tax policy is a hot button issue as candidates for Governor, state legislatures and other state and local offices from both parties claim their plan is more “fair.” But what does a fair tax system look like? Which states actually have the most fair tax systems?

As a follow up to our 2014 Tax Fairness Survey which focused largely on federal tax policy, WalletHub has analyzed and ranked the 50 states based on the fairness of their state and local tax systems — including income taxes, sales & excise taxes, and property taxes. To rank the states, Wallethub conducted a nationally representative online survey of 1,050 individuals to assess what Americans think a fair state and local tax system looks like. Our analysts then compared what Americans think is fair to data on the real structure of tax systems in all 50 states.

We believe this is the first ever ranking of state and local tax fairness that matches representative data on what Americans think is fair with real data on the structure of state and local tax systems.
….So how does the actual structure of state and local tax systems compare to what Americans think is fair? The chart below presents the average real state and local tax burden by income level across the 50 states, as estimated by the Institute on Taxation and Economic Policy (ITEP). We see here that the real relationship between household income and state and local tax burden is negative—as income goes up, state and local tax burden goes down—the exact opposite of what Americans think is fair….
Americans Have No Idea How Regressive Their State and Local Taxes Are
Source: Danny Vinik, The New Republic, September 15, 2014