The survey evaluated the taxes levied by all 50 states – broken down by income, excise, sales and “other” taxes – and how they are levied on people of varying income brackets and compared that to the ideal system of taxation, gathered by asking respondents the question, “In thinking about the fairest possible tax system, what percentage of income do you think households at each income level should pay in state and local taxes?”
The analysis showed Alabama’s tax code to be about equally as fair as the going rates in the U.S.
The state gained high marks for its low sales and excise taxes, which are generally deemed regressive because poor and middle-class taxpayers generally shoulder most of those burdens.
Alabama was 40th most reliant on such taxes for state revenue, plus 37th on “other taxes” like licensure and other miscellaneous fees, which experts similarly agree unfairly burden those least able to afford it.
On the other hand, Alabama was dinged for its relatively high dependence on property taxes – the survey indicated the Yellowhammer State soaks its homeowners more than all but five other states.
Its No. 33 ranking puts the state at slightly more fair than the states of New York, Pennsylvania and southern neighbor Kentucky, which came in at No. 34, and slightly less fair than Rhode Island, South Dakota and Louisiana.
Montana took top honors overall according to the report, being docked only for relatively high sales taxes in the state. Oregon, South Carolina, Delaware and Idaho rounded out the top five, though their paths to the top diverged significantly.
Delaware and Oregon, for instance, have low or no state income tax whereas Montana and South Carolina’s fairness rating was buoyed by low property taxes.
Alabama’s neighbors in Florida ranked No. 45 on the list, pulling up the rear along with Illinois, Arkansas, Hawaii, Georgia and Washington.
The non-scientific survey used results from an online poll of 1,050 Americans.