Alabama is 2020’s state with the 9th lowest tax burden

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Alabama money

The Yellowhammer State rarely makes the top of any favorable lists, but according to a new report from the financial website, WalletHub, Alabama is among the top 10 states with the lowest tax burdens in 2020. According to the report, Alabama ranked the 9th lowest tax burden nationwide, allowing wallets statewide to breathe a little easier. 

Unlike tax rates, which vary widely based on an individual’s circumstances, the tax burden measures the proportion of total personal income that residents pay toward state and local taxes.

And it isn’t uniform across the U.S., either. In order to determine which states tax their residents most aggressively, WalletHub compared the 50 states based on the three components of state tax burden — property taxes, individual income taxes, and sales and excise taxes — as a share of total personal income.

Tax burden in Alabama (1= highest, 25= avg.):
  • 42nd – Overall tax burden (7.36%)
  • 50th – Property tax burden (1.43%)
  • 34th – Individual income tax burden(1.88%)
  • 13th – Total sales & excise tax burden (4.05%)

One reason Alabama’s tax burden is among the lowest is because of the state’s Republican-controlled legislature, which is more adverse to burdensome taxes as compared to Democratic-controlled legislatures across the country.

See how Alabama compares with the rest of the country:

 

Source: WalletHub