Money
Visualizing Unequal State Tax Burdens Across America
Visualizing Unequal State Tax Burdens Across America
What percentage of your income goes into Uncle Sam’s pocket?
Your answer will vary depending on how much you earn. Data shows that low and middle-income families pay a much greater share of their income towards state and local taxes than wealthy families.
Today’s visualization uses data from the Institute on Taxation and Economic Policy (ITEP) to map the effective tax rates—or taxes paid as a share of family income—across income groups at the state and local level.
Crunching the Numbers
The data reflects the effect of tax changes enacted through September 10, 2018, using 2015 income levels (the latest year for available, detailed income data). Both single and married tax filers are included, while elderly taxpayers, dependent filers, and those with negative incomes are excluded.
Taxes Included
The report includes the state and local taxes for all 50 states and the District of Columbia. Taxes are broken into 3 broad groups:
- Consumption taxes – general sales taxes and specialized excise taxes
- Property taxes – including taxes on homes, businesses, and motor vehicles
- Income taxes – paid by individuals and businesses
Federal taxes are not considered.
Editor’s note: It’s worth noting that federal personal income tax has progressive rates, with the lowest earning bracket at 10% and the highest earning bracket at 37% in 2019. At a national level, property taxes are not charged and there is a very low reliance on excise taxes—both of which tend to be regressive as outlined below.
Income Included
The report includes both taxable and tax-exempt income such as worker’s compensation benefits. It also includes estimates for the amount of unreported income.
Which States Have the Most Unequal Tax Burdens?
Across the U.S., there is a wide disparity in how taxes affect different income groups. Here’s how it all breaks down, ranked in order of tax system inequality*:
Total State and Local Taxes As a Share of Income
By State and Income Group
| RANK | STATE | LOWEST 20% | MIDDLE 60% | TOP 1% |
|---|---|---|---|---|
| 1 | Washington | 17.8% | 10.4% | 3.0% |
| 2 | Texas | 13.0% | 9.4% | 3.1% |
| 3 | Florida | 12.7% | 7.7% | 2.3% |
| 4 | South Dakota | 11.2% | 8.4% | 2.5% |
| 5 | Nevada | 10.2% | 7.1% | 1.9% |
| 6 | Tennessee | 10.5% | 8.1% | 2.8% |
| 7 | Pennsylvania | 13.8% | 10.8% | 6.0% |
| 8 | Illinois | 14.4% | 12.2% | 7.4% |
| 9 | Oklahoma | 13.2% | 10.3% | 6.2% |
| 10 | Wyoming | 9.6% | 6.9% | 2.6% |
| 11 | Arizona | 13.0% | 9.3% | 5.9% |
| 12 | Indiana | 12.8% | 10.4% | 6.8% |
| 13 | Ohio | 12.3% | 10.6% | 6.5% |
| 14 | Louisiana | 11.9% | 9.8% | 6.2% |
| 15 | Hawaii | 15.0% | 11.5% | 8.9% |
| 16 | New Hampshire | 9.1% | 7.1% | 3.0% |
| 17 | North Dakota | 10.3% | 7.7% | 4.5% |
| 18 | Alabama | 9.9% | 8.6% | 5.0% |
| 19 | New Mexico | 10.6% | 10.0% | 6.0% |
| 20 | Arkansas | 11.3% | 10.4% | 6.9% |
| 21 | Iowa | 12.4% | 10.5% | 7.7% |
| 22 | Michigan | 10.4% | 9.2% | 6.2% |
| 23 | Kansas | 11.4% | 10.4% | 7.4% |
| 24 | Mississippi | 10.2% | 9.8% | 6.7% |
| 25 | Kentucky | 9.5% | 10.5% | 6.7% |
| 26 | Alaska | 7.0% | 4.3% | 2.5% |
| 27 | Georgia | 10.7% | 9.5% | 7.0% |
| 28 | Missouri | 9.9% | 9.1% | 6.2% |
| 29 | Connecticut | 11.5% | 11.6% | 8.1% |
| 30 | Massachusetts | 10.0% | 9.3% | 6.5% |
| 31 | North Carolina | 9.5% | 9.1% | 6.4% |
| 32 | Rhode Island | 12.1% | 9.3% | 7.9% |
| 33 | Virginia | 9.8% | 9.3% | 7.0% |
| 34 | Wisconsin | 10.1% | 10.4% | 7.7% |
| 35 | Colorado | 8.7% | 8.6% | 6.5% |
| 36 | Nebraska | 11.1% | 10.2% | 8.7% |
| 37 | West Virginia | 9.4% | 8.8% | 7.4% |
| 38 | Idaho | 9.2% | 8.4% | 7.2% |
| 39 | South Carolina | 8.3% | 8.3% | 6.8% |
| 40 | Utah | 7.5% | 8.4% | 6.7% |
| 41 | Oregon | 10.1% | 8.8% | 8.1% |
| 42 | Maryland | 9.8% | 10.6% | 9.0% |
| 43 | Montana | 7.9% | 6.7% | 6.5% |
| 44 | New York | 11.4% | 12.5% | 11.3% |
| 45 | Maine | 8.7% | 9.3% | 8.6% |
| 46 | New Jersey | 8.7% | 10.2% | 9.8% |
| 47 | Minnesota | 8.7% | 9.8% | 10.1% |
| 48 | Delaware | 5.5% | 5.8% | 6.5% |
| 49 | Vermont | 8.7% | 9.4% | 10.4% |
| 50 | District of Columbia | 6.3% | 9.8% | 9.5% |
| 51 | California | 10.5% | 8.9% | 12.4% |
* The ITEP Tax Inequality Index measures the effects of each state’s tax structure on income inequality. In states that rank high for inequality, incomes are less equal after state and local taxes are applied than before. On the flip side, states with the most equality are those where incomes are at least somewhat more equal after state and local taxes are levied than before.
Washington has the most unequal tax burdens. Proportional to their income, Washington taxpayers in the bottom 20% pay almost 6x more than those in the top 1%.
At the other end of the scale, California has the most equal tax system. As a share of their income, the state’s poorest families pay only 0.84x what the wealthiest families pay.
Overall, however, the vast majority of tax systems are regressive.
On average, the lowest 20% of income earners pay 1.54x more of their income in taxes compared to the top 1%.
The Main Causes
Two main factors drive a tax system’s (lack of) equality: how the state designs each tax, and the state’s reliance on different tax sources.
To better explain how this works, let’s take a closer look at each type of tax.
Sales & Excise Taxes
These taxes apply only to spent income, and exempt saved income. Since families with a higher household income are able to save a much larger percentage of their income, and the poorest families can barely save at all, the tax is regressive by nature.
The particular types of items that are taxed affect fairness as well. Quite a few states include food in their sales tax base, and low-income families spend the majority of their income on groceries and other necessities.
Not only that, excise taxes are levied on a small subset of goods that typically have a practical per-person maximum. For example, one person can only use so much fuel. As a wealthy family’s income increases, they generally do not continue to increase their spending on these goods.
States rely on these taxes more than any other tax source, which only exacerbates the problem.
Property Taxes
For the average household, the home makes up the majority of their total wealth—meaning most of their wealth is taxed. However, the wealth composition of richer families skews much more heavily towards stock portfolios, business equity, and other assets, which are exempt from property taxes.
While these types of assets are subject to taxes like capital gains and dividends, the distinction is that these taxes are levied only on earned gains. In contrast, property taxes are owed simply as a result of owning the asset.
What about those who don’t own homes? Landlords generally pass on the cost of property tax to renters in the form of higher rent. Since rent comprises a much higher share of expenses for poorer families, this makes property tax even more inequitable.
Income Taxes
State income taxes are typically progressive. This means effective tax rates go up as income goes up. Here’s how the U.S. averages break down:
- Low-income families: 0.04%
- Middle-income families: 2.1%
- Top 1%: 4.6%
However, certain policy choices can turn this on its head. Some states have a flat rate for all income levels, a lack of deductions and credits for low-income taxpayers, or tax loopholes that can be beneficial for wealthier income groups.
Nine states charge no income tax at all, garnering reputations as “low tax” states—but this is true only for high-income families. In order to make up for the lost revenue, states rely more heavily on tax sources that disproportionately affect the lowest earners.
Evidently, states with personal income taxes have more equitable effective tax burdens.
Tackling Systemic Issues
Regressive state tax systems negatively impact the after-tax income of low and middle-income families. This means they have less to spend on daily expenses, or to save for the future.
Not only that, because wealthier families aren’t contributing a proportional share of tax dollars, state revenues grow more slowly.
For states looking to create a more equitable tax system, states with progressive systems offer some guidance:
- Graduated income tax rates
- Additional tax over a high-income threshold (e.g $1 million)
- Limits on tax breaks for upper-income taxpayers
- Targeted low-income tax credits
- Lower reliance on regressive consumption taxes
By implementing such policies, governments may see more tax equality—and more tax dollars for programs and services.
Hat tip to reddit user prikhodkop, whose visualization introduced us to this data.
Personal Finance
How Does Your Personality Type Affect Your Income?
Can your Myers–Briggs personality type impact how much you make? See for yourself with this breakdown of average income for all 16 personality types.
How Does Your Personality Type Affect Your Income?
You’ve just finished giving a presentation at work, and an outspoken coworker challenges your ideas. Do you:
a) Engage in a friendly debate about the merits of each argument, or
b) Avoid a conflict by agreeing or changing the subject?
The way you approach this type of situation may influence how much money you earn.
Today’s infographic comes to us from Truity, and it outlines the potential relationship between personality type and income.
Through the Myers-Briggs Lens
The Myers-Briggs personality test serves as a robust framework for analyzing the connection between personality and income, in a way that is easily understood and familiar to many people.
The theory outlines four personality dimensions that are described using opposing traits.
- Extraversion vs. Introversion: Extroverts gain energy by interacting with others, while introverts draw energy from spending time alone.
- Sensing vs. Intuition: Sensors prefer concrete and factual information, while intuitive types use their imagination or wider patterns to interpret information.
- Thinking vs. Feeling: Thinkers make rational decisions based on logic, while feelers make empathetic decisions considering the needs of others.
- Judging vs. Perceiving: Judging types organize their life in a structured manner, while perceiving types are more flexible and spontaneous.
For example, someone who aligns with extraversion, sensing, thinking, and judging would be described as an ESTJ type.
The researchers surveyed over 72,000 people to measure these four personality preferences, as well as 23 unique facets of personality, income levels, and career-related data.
Traits With the Highest Earning Potential
Based on the above four dimensions, extroverts, sensors, thinkers, and judgers tend to be the most financially successful. Diving into specific personality characteristics, certain traits are more closely correlated with higher income.
| Personality Type | Average Income Advantage (Annual) | Trait(s) Most Correlated With Income Advantage |
|---|---|---|
| Extroverts | $9,347 | Expressive, Energetic, Prominent |
| Sensors | $1,910 | Conceptual |
| Thinkers | $8,411 | Challenging, Objective, Rational |
| Judgers | $6,903 | Ambitious |
For instance, extroverts are much more likely to have higher incomes if they are quick to share thoughts, have high energy, and like being in the public eye. Thinkers also score high on income potential, especially if they enjoy debates, make rational decisions, and moderate their emotions.
The Top Earners
Which personality types earn the highest incomes of all? Extroverted thinking types dominate the ranks again.
Source: Truity
The one exception is INTJs, with 10% earning an annual salary of $150K or more in their peak earning years.
Personality and the Gender Pay Gap
With all these factors in mind, the researchers analyzed whether personality differences would affect the gender pay gap.
When the average salaries were separated for men and women, the results were clear: men of almost all personality types earn more than the average income for the sample overall, while all but two personality types of women earned less than the average.
Source: Truity
In fact, women with high-earning personality types still earn less than men who do not possess those traits. For example, extroverted women earn about $55,000 annually, while introverted men earn an average of over $64,000.
Maximizing Your Potential
Are the introverted personalities of the world doomed to lower salaries? Not necessarily—while personality does play a role, many other factors contribute to income levels:
- Level of education
- Years of experience
- Local job market
- Type of industry
- The particular career
Not only that, anyone can work on the two specific personality traits most aligned with higher incomes: set ambitious goals, and face conflict head-on to ensure your voice is heard.
Politics
Interactive Map: Tracking Global Hunger and Food Insecurity
Every day, hunger affects more than 700 million people. This live map from the UN highlights where hunger is hitting hardest around the world.
Interactive Map: Tracking Global Hunger and Food Insecurity
Hunger is still one the biggest—and most solvable—problems in the world.
Every day, more than 700 million people (8.8% of the world’s population) go to bed on an empty stomach, according to the UN World Food Programme (WFP).
The WFP’s HungerMap LIVE displayed here tracks core indicators of acute hunger like household food consumption, livelihoods, child nutritional status, mortality, and access to clean water in order to rank countries.
After sitting closer to 600 million from 2014 to 2019, the number of people in the world affected by hunger increased during the COVID-19 pandemic.
In 2020, 155 million people (2% of the world’s population) experienced acute hunger, requiring urgent assistance.
The Fight to Feed the World
The problem of global hunger isn’t new, and attempts to solve it have making headlines for decades.
On July 13, 1985, at Wembley Stadium in London, Prince Charles and Princess Diana officially opened Live Aid, a worldwide rock concert organized to raise money for the relief of famine-stricken Africans.
The event was followed by similar concerts at other arenas around the world, globally linked by satellite to more than a billion viewers in 110 nations, raising more than $125 million ($309 million in today’s dollars) in famine relief for Africa.
But 35+ years later, the continent still struggles. According to the UN, from 12 countries with the highest prevalence of insufficient food consumption in the world, nine are in Africa.
| Country | % Population Affected by Hunger | Population (millions) | Region |
|---|---|---|---|
| Afghanistan 🇦🇫 | 93% | 40.4 | Asia |
| Somalia 🇸🇴 | 68% | 12.3 | Africa |
| Burkina Faso 🇧🇫 | 61% | 19.8 | Africa |
| South Sudan 🇸🇸 | 60% | 11.0 | Africa |
| Mali 🇲🇱 | 60% | 19.1 | Africa |
| Sierra Leone 🇸🇱 | 55% | 8.2 | Africa |
| Syria 🇸🇾 | 55% | 18.0 | Middle East |
| Niger 🇳🇪 | 55% | 22.4 | Africa |
| Lesotho 🇱🇸 | 50% | 2.1 | Africa |
| Guinea 🇬🇳 | 48% | 12.2 | Africa |
| Benin 🇧🇯 | 47% | 11.5 | Africa |
| Yemen 🇾🇪 | 44% | 30.0 | Middle East |
Approximately 30 million people in Africa face the effects of severe food insecurity, including malnutrition, starvation, and poverty.
Wasted Leftovers
Although many of the reasons for the food crisis around the globe involve conflicts or environmental challenges, one of the big contributors is food waste.
According to the United Nations, one-third of food produced for human consumption is lost or wasted globally. This amounts to about 1.3 billion tons of wasted food per year, worth approximately $1 trillion.
All the food produced but never eaten would be sufficient to feed two billion people. That’s more than twice the number of undernourished people across the globe. Consumers in rich countries waste almost as much food as the entire net food production of sub-Saharan Africa each year.
Solving Global Hunger
While many people may not be “hungry” in the sense that they are suffering physical discomfort, they may still be food insecure, lacking regular access to enough safe and nutritious food for normal growth and development.
Estimates of how much money it would take to end world hunger range from $7 billion to $265 billion per year.
But to tackle the problem, investments must be utilized in the right places. Specialists say that governments and organizations need to provide food and humanitarian relief to the most at-risk regions, increase agricultural productivity, and invest in more efficient supply chains.
-
Technology2 weeks agoMapped: The Fastest (and Slowest) Internet Speeds in the World
-
Markets4 weeks agoMapping The Biggest Companies By Market Cap in 60 Countries
-
Datastream2 weeks agoRanked: The Top 10 Richest People on the Planet
-
Healthcare4 weeks agoVisualizing the World’s Biggest Pharmaceutical Companies
-
Personal Finance1 day agoHow Does Your Personality Type Affect Your Income?
-
Markets3 weeks agoThe Best Selling Vehicles in America, By State
-
Datastream1 week agoVisualizing the Fastest Trains in the World
-
Markets4 weeks agoThis Simple Chart Reveals the Distribution Of Global Wealth