Alabama ranked 8th lowest tax burden in the U.S., says study

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With less than a week remaining until Tax Day, Americans across the country are finding the current tax code too confusing to determine exactly how much their home states are actually taking from their income in taxes.

Which is why personal finance website, WalletHub, conducted an in-depth analysis of states with the highest and lowest tax burdens. As luck would have it for Alabamians, the state ranks toward the bottom of the list of states with the highest tax burdens in the country with the 8th lowest tax burden in the country.

Tax Burden in Alabama (1=Highest, 25=Avg.):
  • 43rd: Overall tax burden (7.41%)
  • 49th: Property tax burden (1.51%)
  • 35th: Individual income tax burden (1.90%)
  • 16th: Total sales and gross receipts tax burden (4%)

In order to determine which states tax their residents most aggressively, WalletHub’s analysts compared the tax burdens of the 50 states by measuring property taxes, individual income taxes, and state and gross receipts taxes — the three components of state tax burden — as percentages of the total personal income in each state.

While Alabama ranked the 8th lowest in overall tax burden, the state ranked as the nation’s 16th highest sales tax burden.

“The least fair tax is the sales tax specifically sales tax levied on life’s necessities, such as food purchased in grocery stores,” said David Shock, a professor of political science at Kennesaw State University an expert who weighed in on the study.

Shock explained that southern states, like Alabama and Tennessee, the poor often pay a higher percent of their wages in state and local taxes have because these states still tax grocery items, while many states across the country no longer tax such necessities.

Here’s how the entire country ranked:

Source: WalletHub
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