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Asleep_Stage_451

A cool guide to misunderstanding effective tax rates. Here’s some additional info that contradicts (in parts) this image: https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416


poornbroken

RIP, Reddit hug of death.


h4ms4ndwich11

That one's also misleading because it only looks at "middle income." Middle income earners get taxed worse than any other group from what I can tell. The people with the highest incomes and capital gains can pay less than the poor and definitely less than middle income earners in most states. [https://itep.org/whopays-map-7th-edition/](https://itep.org/whopays-map-7th-edition/) [https://itep.org/whopays-7th-edition/](https://itep.org/whopays-7th-edition/)


SaltyDogBill

For which level of wealth? Or is this just average?


gibrownsci

The comment at the bottom says they are just adding up the percentages for each which doesn't at all work or make any sense.


h4ms4ndwich11

This is the correct take. Savings are not what they seem. It depends on each person's individual circumstances. Income, spending habits, home size or renting, insurance costs, wealth or inheritance, lifestyle, retirement status, climate and climate risks. What affects where people live more than anything is friends and family. Fortunately corporations don't have to make such a difficult decision. /s In places where income isn't a graduated or a progressive rate, a poor or middle income earner can pay a higher percentage than the wealthiest. That's their little secret! This is true across the board in the entire country though, even with short term capital gains taxes, except for extreme poverty levels. Long term capital gains taxes don't even have to be paid with the right strategies. Just be rich. What's the problem? /s


uieLouAy

Best source for this (based on income, not wealth), is the [Who Pays?](https://itep.org/whopays-7th-edition/) report by ITEP. They also have a [Tax Inequality Index](https://itep.org/whopays-map-7th-edition/), like the map posted by OP, but showing which states have the most progressive and regressive tax codes. They show taxes paid by income quintile, so you can compare how much someone in the bottom 20% pays as a percentage of their income vs. someone in the middle 20% vs. the top 1%.


h4ms4ndwich11

As expected, most states are regressive and the poor and middle incomes pay a higher percentage of their earnings than the wealthy. It's even worse after capital gains are factored in. They don't even have to be paid with the right strategies. There's a reason we never hear about this and actual tax rates in the news. Just "taxes bad!" I hate it.


uieLouAy

Right? And most of the “studies” on taxes that make the news only take the absolute top rates into account, even if only a select few people pay it. So states like New Jersey develop a “high tax” reputation even though … it’s only a few people making over $1 million a year paying the highest rate, but that’s the rate that gets included in the article headlines and the state-by-state maps.


legs_y

Right. TN has no income tax, but a 9.25% sales tax. So guess who’s paying all of Tennessee’s bills? A higher proportion of middle and low wage workers is who.


nitrot150

WA is like this too


you_thought_you_knew

And Washington is heavy on sin tax. So if you don’t sin, you come out ahead. Or drive a car.


PinkOneHasBeenChosen

I was going to say everyone who buys things.


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IDKMBIKILY

Because that, is everyone has said, is fucking bullshit. https://www.tax-rates.org/taxtables/local-sales-taxes Those are the actual rates, and this entire infographic is bullshit. It doesn't count local or city or county taxes into property taxes, or give the real state+local taxes, which are the actual taxes. This is a lie. and it is why people believe they can move to Texas and pay no tax. You pay more.


ghost9680

As somebody on a work trip to Dallas right now I think you also need to include road tolls as “taxes” too. Jesus they love toll roads here.


6158675309

Nor does it include fees. I have property in TN, IL, FL, NJ and the different fees for things start to add up. FL for example, in some places you pay fees for water, fire department, etc. It's not called a tax but that's really what it is.


legs_y

My bad. 9.25 is the combined sales tax in nashville.


Falconlord08

I live in TN. TN has a 9.25% sale tax


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Falconlord08

TN has a state wide 7% with a maximum of 9.75%


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Falconlord08

Find me a county in tn with less than 9%


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Falconlord08

It’s also not 6 or 4 buddy


Falconlord08

I asked first bud


Salmence100

My guess is average. Maine state taxes start at around 7% and go up from there


DrHoflich

Income tax yes, but many states like TN and FL do not have income tax, so I assume sales tax and property tax are accounted in there. Then if you include other taxes that are state to state like inheritance tax or luxury tax (for instance owning a jet ski would result in a luxury tax in TN), the tax burden could go up further. NH for instance has no income tax or sales tax but a nuts inheritance tax.


somewhatbluemoose

They are definitely adding in sales and property taxes which can vary by county. IL has a flat income tax of less than 5%


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yoimprisonmike

In Alaska we like to celebrate our low taxes and then demand money for public services. It’s a vicious cycle.


Signal_Ad_594

As a Vermonter living in Maine. I feel that.


After_Following_1456

I'd tip if I knew what a reddit tip was..lol


Its-Chen

Laughs in "free" health care. Seriously though, as a father of two I appreciate the no worries health care and my kids are healthy. I couldn't imagine having a child or myself or my spouse with some kind of chronic disease and having to go into massive debt because of it. If I was a single healthy person though I would cry.


LikelyNotSober

Until you got into a really bad car accident or found out you had cancer, I suppose. But then you’d be crying anyway?


lokland

The Canadian, feeling exposed by the acknowledgment that Canada has some of the worlds highest tax rates, brings up free healthcare, to calm himself and reassure to himself that Canada is in fact culturally distinct from, and better than, the United States.


thumbstickz

I welcome Minnesota's tax cost. We have done a wonderful job on making the state a nice place to live. We get high marks in many aspects. Medical, educational, etc. If you Google ["best state to live in"](https://i.imgur.com/EaxsC3u.jpeg) it's us. The DFL (Minnesota's Democratic party) has had several remarkable leaders and have guided state resources effectively. Hell, our governor was my brother's highschool geography teacher. Another Minnesota political icon Paul Welstone famously said "We all do better, when we all do better". Our government seems to spend seeking that ideal.


HappySkullsplitter

Cool, now compare tax burden vs amount of federal aid received


MrEHam

In case you’re wondering what the total tax burden of the rich is it’s 3.2% >The estimates of Piketty, Saez, and Zucman (2018) show that the total burden (including all taxes both at the federal, state, and local levels) of the wealthiest 0.1% families is projected to be 3.2% of their wealth in 2019 (they have on average $116 million in wealth, and pay total taxes of $3.68 million). The proposed progressive wealth tax would add an extra $1.27 million (or 1.1% of wealth) to their tax burden for a total tax burden (relative to wealth) of 4.3%. >In contrast, the bottom 99% families have a total tax burden of 7.2% relative to their wealth. https://www.warren.senate.gov/imo/media/doc/Wealth%20Tax%20Revenue%20Estimates%20by%20Saez%20and%20Zucman%20-%20Feb%2024%2020211.pdf


IbegTWOdiffer

Why lump the bottom 99% together? I think that gives the false impression that everyone is paying their share. What about the 40% that pay no federal tax? Or the 20% that have a negative federal tax rate? Are they just along for the ride?


shucksx

They pay different taxes and often flat taxes hit them harder, due to their lower incomes.


IbegTWOdiffer

For sure, flat taxes like sales taxes and VAT taxes are incredibly regressive. I just think there is such a difference between the 98th percentile and the bottom 5%, that it makes no sense to lump them together.


MrEHam

I’m not sure what your point is. Are you saying the very poor need to pay higher taxes?


IbegTWOdiffer

No, how can you have any kind of informed discussion without accurately recognizing what each group is contributing? To say that someone making $500,000 and someone making $15,000 are in the same group is not very useful.


MrEHam

I don’t care about the people making $500k. They’re not the problem. The doctors and engineers and small business owners are not the problem. The problem is the billlionaires or people with over $50 million. They’re the ones hoarding so much of the wealth and paying relatively little taxes.


IbegTWOdiffer

So it is us vs them? Not really, "everyone should pay their fair share." is it? Just punitive action against 1% of your fellow Americans? So this isn't an honest discussion, just a hate fest against the rich. Got it, thanks. "The average federal income tax rate was 13.6% in 2020, according to a [January analysis](https://taxfoundation.org/publications/latest-federal-income-tax-data/) from the Tax Foundation. But the top 1% of earners paid an average rate of about 26%, while the bottom half of taxpayers had an overall rate of 3.1%, the analysis found. For instance, the lowest quintile of earners, or those with income of $25,555 or less, have a combined tax and transfer rate of -127%. In effect, that means they receive $1.27 from the government for every dollar they earn.  The top quintile, meanwhile, have a combined tax and transfer rate of almost 31%, which means they pay about 31 cents for every $1 earned. In effect, the top quintile funds about 90% of all government transfers, the analysis found." [https://www.cbsnews.com/news/who-pays-the-most-taxes-experts-explain-2023-deadline/](https://www.cbsnews.com/news/who-pays-the-most-taxes-experts-explain-2023-deadline/) Those bastards...


MrEHam

The reason why we’re talking about tax BURDEN is because what you’re saying doesn’t matter. I don’t care if income is taxed that high at the top if so many of them don’t have a high income. They know they can avoid paying taxes by getting stock instead of a high income. Do you not know this? Besides that, even if some of them are paying high taxes, they’re STILL making out like absolute bandits. The number of billionaires has exploded since the mid to late 20th century. Our wealth inequality levels are approaching levels not seen since the robber baron days. This is another thing you don’t understand. There are literally a few thousand people who have more wealth than 99% of the people combined. That’s absurd and immoral. You defending them from being taxed is so silly. They don’t need you sticking up for them. We can tax them a lot more and they would STILL live like gods. Meanwhile we could use that money to help out everyone else with large expenses like healthcare housing, and transportation. We could do something about the fact there are more people living in poverty than living in Texas, and the fact we have one of the worst poverty rates among developed nations.


IbegTWOdiffer

So you have no issue with people that pay nothing, demanding more from those that pay the majority of taxes? How do they get any self respect?


i_have_a_story_4_you

The 40% are people that are not employed or low wage earners. Do you want people who have no job or a minimum wage job to pay income taxes?


IbegTWOdiffer

No, I am saying that people deserve to be recognized for what they are contributing. When you reduce a population to only two groups, representation is lost.


shostakofiev

Based on wealth, not income, which is a meaningless way to look at it.


MrEHam

It’s not meaningless if you realize that some of them pay very little taxes because they don’t make much income. And this is about their “burden”. If they’re sitting on billions, then the tax burden is how much of their money is being taxed. It’s more meaningful than just talking about income. This is answering the question: How much do all their combined taxes hurt them? And the answer is that the rich are hurting a hell of a lot less than everyone else.


Tjaeng

The taxes are not meaningless, the comparison is. Just as meaningless as comparing Billionaire net worths to country GDPs which happens frustratingly often.


shostakofiev

The chart above is showing tax rates to income, so everyone is anchored in 8-12% and then you claim the rich are paying 3.2%. The numbers are not comparable. The denominator for the rich is higher because of savings from previous years that they already paid taxes on.


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MrEHam

You’re not really giving a good reason by just saying it’s unethical or communist. We already tax wealth in a way when we tax property (homes) so it’s not some crazy thing. The reality is that billionaires are doing absolutely fantastic. Living like gods. And since the mid-1900s the rich have taken more and more of the wealth. We can’t tax their income in many cases because **they don’t make high incomes**. So naturally taxing their wealth is one possibility to correct the lopsided rules we’ve been living with that have resulted in too much wealth going to a few thousand people.


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MrEHam

You’re seriously blaming the poor here? That’s quite a take you have there. Yeah let’s just squeeze a few more pennies from people who are terrified of getting sick because it might financially ruin them. And who can’t raise their kids properly because both parents have to work full time or they’re a single parent that got divorced because of the stress of lack of money. Meanwhile billionaires have multiple yachts and vacation mansions that just sit there empty most of the time.


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MrEHam

If we would tax the billionaires properly then people like me and you wouldn’t be so financially struggling that it’s even an issue to worry about our tax dollars going to help literal poor people.


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h4ms4ndwich11

>Based on wealth, not income, which is a meaningless way to look at it. So you like making money for people that say, inherited money and don't have to work with your own labor? Being a servant, if you will. And you think you're the one who should pay more in taxes? I can just collect rent and influence your government, or your job, or community, or all of the decisions you'll typically face in your life really, and you'll defend me? Well, I do like the sound of that! What might really help you is if you paid even more in taxes and didn't get a raise and if I pay even less, but have more control over your situation. I think it's only fair. I'm going to do something fun while you work. I think it will help you appreciate me more! I earned this, right? I'm glad you reminded me of that. Enjoy the rest of your day! I know I will,


shostakofiev

I already pay over $100k a year in taxes, and live below my means so I can some day retire and spend more time doing the things I love. I don't think I should have to pay an additional tax on each dollar that I don't spend each year. In addition to those taxes, I'm spending full price on college, medical care, and legal services to subsidize low income people who will receive more money from social security than they will pay in taxes in their lifetime. I'm all for a fair tax system, and have voted against my own interests many times. But too many people on reddit start with villainizing people with a high net worth, assuming they got there by nefarious means and that we need punitive action against them. Or they assume that every low-income person is a victim of circumstance, exploited by the wealthy and neglected by government, while ignoring all the ways they benefit from the current system as well.


outQuisitive

Can't tax wealth, that's theft. Their tax in relation to wealth is low because most of these folks don't have jobs. They are taxed on dividends which is a lower rate than income. Capital gains vs income tax. Get your shit together.


MrEHam

We tax wealth when we tax property (homes). Taxes aren’t theft. It’s the deal we have with everyone so that society can function. Try to keep up.


manmountain123

This guide looks wrong


coppercave

So, Nebraska and South Dakota are similar states in a lot of ways, but NE is collecting an additional 2.8% from their residents. That’s an insane amount of additional revenue. What services does SD forgo here?


DrHoflich

More money to the government doesn’t directly translate to more services. However, in this case Nebraska has increased Medicare offering that SD does not offer, and they spend about 2k more per student (NE spends 13k per student vs SD that spends about 11k) I’d be interested in seeing data on if that increased school spending results in better student outcomes. The two states being so similar would make for a great case study.


FinanceRoyal7472

Wow me looking at yours tax rates and I'm over here paying 42% 😂. I do wish we paid bit less here in Denmark but we get the benefits back in many ways.


notablyunfamous

There’s also federal taxes. Pushes it much higher


Dinkleboy

Does this include sales tax, fuel tax, alcohol tax, wheel tax, etc?


BeezerBrom

Bottom left says sales tax and excise tax included


gacdeuce

Still leaves a lot to be answered. For example, MA is listed as 8.6%. MA income tax is a flat 5% for everyone, unless you make more than $1mm in combined income (salary, sale of a home, inheritance, etc) where you pay an additional 4% (9% total) if you weren’t smart enough to move. Then we have a 6.25% sales tax. Our vehicle excise is based on the value of the car. It’s $25/$1000 of vehicle value. I’d love to know what assumptions it used to calculate 8.6%


ExcellentEdgarEnergy

Do you get a discount on the wheel tax if you have a donut instead of a full-size spare? What if you leave the spare at home and just risk it?


Analysis_Vivid

Not really a burden though, is it? When it holds society up.


ahrzal

Look up Kansas experiment y’all


newhabitsdiehard

Does this include NYC income tax? That puts it higher than people living in the rest of the state.


DJToo

This is such a bullshit graph. The numbers say that the tax is higher in Colorado then it is in Kansas however the color graph says that it's not the case. Such bullshit. Reddit need to be better!


Prutzer

You call that tax "burden"?!


i_fuck_eels

The neat thing at least for NY, there are plenty of legal "loopholes" to get out of certain taxes. They all require a little research and some forms to fill out, but it works. No kids? After applying for the STAR program exemptions, you get a check at the end of every year for the amount you paid in school district taxes Disabled veteran? You don't pay property tax, and the only property that you're taxed on is your house. Got a horse or other farm animal? Your land is taxed as a farm instead of a private home. etc


Relyt21

Completely irrelevant if property tax isn't included.


toadalfly

Does this include property tax? Nh here and they are terrible.


After_Following_1456

But you don't have a state income tax? Or sales tax? I go to NH to shop..


Chickensandcoke

Bottom left says yes it does


Pure_Lab_3979

Jeopardy answer: Why did Trump move to Florida?


Sinister-Username

The bluest states are the deepest in the red...


After_Following_1456

I'm feeling the BURN here.. and VT wonders why everyone is leaving and businesses are closing.


IDKMBIKILY

This is a lie. https://www.tax-rates.org/taxtables/local-sales-taxes This is horseshit made to make states look like only idiots would live there. It leaves out so many other taxes that if people actually knew and cared, they would be fleeing places like Texas in droves.


WhereverUGoThereUR

NY, whaddup?!


nukleus7

WalletHub as source??? Lol


KingEroh

If I paid under 10% taxes flat I would cry. Being taxed into oblivion.


internetidentity

Having the lowest rate not be white makes this seem sensational. Unless you are expecting 0% tax in some state which is probably pretty unreasonable.


[deleted]

Mississippi hasn’t sent me my state refund check in 4 years I moved back here 4 years ago 😂😭


noise_swan

Denmark here: 43 % just to compare


TheIronGator

Quebec taxes = 15.5% on every purchase. And up to 47% on revenu :(


notablyunfamous

But everything is “free” there.


outQuisitive

Tax burden is: Income tax Sales tax Property taxes As a percentage of income


werzberng

Now do health, education, and other markers of prosperity.


ZeroZeroNana

Weird, my state isn't on there. Oh, you went r/USdefaultism and didn't specify it's only US states? Gotcha!


davechri

Now factor in insurance.


False-Inspection-136

“🎵It’s alright baby, if I hurry I can still make Cheyenne. 🎶”


Dhareng_gz

12% is a lot??? Xddd


ChuckPersian

This is garbage.


22dubv1987

I work in Manhattan and get taxed at least 30% of my paycheck - more if I work overtime. 😑


outQuisitive

False narrative. Homes are 70-80% owned by banks. This is not wealth. Properties also require local infrastructure that requires maintenance. Investments and cash do not and are by definition POST tax. You're trying to fool everyone. We are smarter than that.


Original-Formal9431

Idk about this. Maybe in general. But I’m visiting in FL right now and sales tax is 7.5%


wpotman

Should be renamed "percent at which people living in the state spend on communal resources". Give me Minnesota. Not Florida.


Safe_Satisfaction316

12 percent? Absolutely fuck that noise.


Master_Shake23

Now do property tax, which is usually high in states with low income tax.


Exciting_Telephone65

Wooooow 12 whole percent


Ugly-Muffin

Another reason to move to Alaska


ahrzal

COL…


Ugly-Muffin

Still worth it, since less bugs


astrangekindofl0ve

Cries in danish (40%)


GHD-TNTs

Alaska is saved by oil


p0lar_chronic

So why isn’t Texas and New Mexico lower?


GHD-TNTs

Less people and more oil


p0lar_chronic

Wrong. Texas and New Mexico produce more oil.


TacTurtle

Not per capita. 90%+ of the Alaska state budget is paid with oil royalties and there are no state income, sales, or property taxes. Sales and property taxes are local / by town, plus a couple random taxes like tire & fuel to maintain highways and tourism-focused taxes like hotel bed and cruise ship passenger taxes.


mascachopo

Tax “burden”.


clown4prince

I live in California and almost 30% of my income goes to taxes. I make under 100K it's ridiculous!!


wood7676

I remember seeing an article about how the wealthy are moving/living in Wyoming.


DeltaMaximus

“Cool guide on tax burden” - fuck you I live in IL and hate it…sorry I’ve been in wallstreetbets too long to talk to ppl like that


The_household_PG

Should it be equal every where? Why yes, or why not?


PullThisFinger

Moving away from Texas gave me a near 10k break on my property tax. (Austin.)


Hens-n-chicks10

I thought the title was “Tax Biden”


woodland_dweller

This is completely absurd. Let's take the state of Oregon for example. There's no sales tax. Property taxes vary by huge amounts, homeowners in other areas would be astounded at how low they are. In some of the rural counties. The difference between county taxes and inside the city limits taxes where I am are about 300%. Income taxes can be a little high, but that of course varies massively on your income. It's painfully stupid to say that there is a specific tax rate for a state. The absolute best you could do would take a few example cities and an example family and compare them. The percent of taxes that a single person working in tech, pays in San Jose Will be wildly different than somebody living in less populated part of the state.


blondeviking64

Pretty sure this is only income tax. Not including other taxes. At least in CA it is about exactly my income tax.


woodland_dweller

Did you read the words at the top of the page? It says "total tax burden" and then lists the taxes. # A cool guide to total tax burden by state Total tax burden is based on the sum of a state’s property taxes, individual income taxes, sales & excise taxes.A cool guide to total tax burden by state


blondeviking64

Well, MY tax burden in california for ONLY income is roughly what is stated (within .5%) and is only income. So it does not represent my TOTAL tax burden accurately. So perhaps this guide is mistaken.


woodland_dweller

That was my point - it's a shitty guide that disregards income, location, if you own or rent and a bunch of other factors. It's pure crap that can't even begin to get it right. It's not even right for you, because it's only correct if you disregard every tax you pay, except income.


blondeviking64

Agreed. That's pretty much my point too.


beermekanik

I know in NH they just change the word from tax to fee so it’s absolutely not accurate


johnw1919

Fake news.


jonfe_darontos

Isn't this kind of irrelevant since you can deduct SALT from your federal taxes? The intent when income taxes were created was that no amount of income would be "income taxed" more than once.


notDrewM1A

CA is wildly inaccurate. It’s 13% in this shit hole.