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Visualizing Unequal State Tax Burdens Across America

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Unequal U.S. State Tax Burdens

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unequal us tax burdens

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

RANKSTATELOWEST 20%MIDDLE 60%TOP 1%
1Washington17.8%10.4%3.0%
2Texas13.0%9.4%3.1%
3Florida12.7%7.7%2.3%
4South Dakota11.2%8.4%2.5%
5Nevada10.2%7.1%1.9%
6Tennessee10.5%8.1%2.8%
7Pennsylvania13.8%10.8%6.0%
8Illinois14.4%12.2%7.4%
9Oklahoma13.2%10.3%6.2%
10Wyoming9.6%6.9%2.6%
11Arizona13.0%9.3%5.9%
12Indiana12.8%10.4%6.8%
13Ohio12.3%10.6%6.5%
14Louisiana11.9%9.8%6.2%
15Hawaii15.0%11.5%8.9%
16New Hampshire9.1%7.1%3.0%
17North Dakota10.3%7.7%4.5%
18Alabama9.9%8.6%5.0%
19New Mexico10.6%10.0%6.0%
20Arkansas11.3%10.4%6.9%
21Iowa12.4%10.5%7.7%
22Michigan10.4%9.2%6.2%
23Kansas11.4%10.4%7.4%
24Mississippi10.2%9.8%6.7%
25Kentucky9.5%10.5%6.7%
26Alaska7.0%4.3%2.5%
27Georgia10.7%9.5%7.0%
28Missouri9.9%9.1%6.2%
29Connecticut11.5%11.6%8.1%
30Massachusetts10.0%9.3%6.5%
31North Carolina9.5%9.1%6.4%
32Rhode Island12.1%9.3%7.9%
33Virginia9.8%9.3%7.0%
34Wisconsin10.1%10.4%7.7%
35Colorado8.7%8.6%6.5%
36Nebraska11.1%10.2%8.7%
37West Virginia9.4%8.8%7.4%
38Idaho9.2%8.4%7.2%
39South Carolina8.3%8.3%6.8%
40Utah7.5%8.4%6.7%
41Oregon10.1%8.8%8.1%
42Maryland9.8%10.6%9.0%
43Montana7.9%6.7%6.5%
44New York11.4%12.5%11.3%
45Maine8.7%9.3%8.6%
46New Jersey8.7%10.2%9.8%
47Minnesota8.7%9.8%10.1%
48Delaware5.5%5.8%6.5%
49Vermont8.7%9.4%10.4%
50District of Columbia6.3%9.8%9.5%
51California10.5%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.

effective us state and local tax rates

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.

equality and personal income tax

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.

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Mapped: The Top 10 Billionaire Cities

Where do the most billionaires live? For years, NYC has topped the list of billionaire cities, but 2020 marked a monumental shift.

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Mapped: The Top 10 Billionaire Cities in 2020

In 2020, the world gained 493 new billionaires—that’s one every 17 hours.

For the last seven years, New York City has been home to more billionaires than any other city in the world. However, last year marked a monumental shift in the status quo.

Beijing has unseated the Big Apple, and is now home to 100 billionaires. That’s one more billionaire than the 99 living in New York City.

Today’s map uses data from Forbes to display the top 10 cities that house the most billionaires.

Where do the Most Billionaires Live?

The richest of the rich are quite concentrated in cities, but some cities seem to best suit the billionaire lifestyle. Here’s a breakdown of the top 10 billionaire capitals and the collective net worth of all the ultra wealthy that live there.

RankCityRegionNumber of BillionairesNet Worth of the City's Billionaires
#1Beijing🇨🇳 Asia100$484.3B
#2New York City 🇺🇸 North America99$560.5B
#3Hong Kong🇨🇳 Asia80$448.4B
#4Moscow🇷🇺 Europe79$420.6B
#5Shenzhen🇨🇳 Asia68$415.3B
#6Shanghai 🇨🇳 Asia64$259.6B
#7London 🇬🇧 Europe63$316.1B
#8Mumbai🇮🇳 Asia48$265.0B
#9San Fransisco🇺🇸 North America48$190.0B
#10Hangzhou🇨🇳 Asia47$269.2B

Some cities have some obvious billionaires that come to mind. New York’s richest person and former mayor, Michael Bloomberg, is worth $59 billion. Beijing’s richest billionaire is the founder of TikTok (among other things), Zhang Yiming with a net worth of $35.6 billion.

In terms of the locations themselves, London, New York, and San Francisco are the only Western cities to make the list. Though New York was ousted from the top position last year, altogether the city’s billionaires are still worth more than Beijing’s.

One new city to make the top 10 list of billionaire cities was Hangzhou, the home of Jack Ma. It booted out Singapore from the 10th spot.

East Meets West

More than half of the top 10 cities are located in Asia, providing evidence of the shift eastwards when it comes to seats of wealth. Five of the six Asian cities listed are all in China.

What’s helped lead to this?

The country has seen an e-commerce boom, not in the least thanks to the pandemic. Additionally, the efficient handling of COVID-19 has allowed the economy to get back on track much more quickly than other countries. According to the BBC, 50% of China’s new billionaires have made their wealth either through tech or manufacturing.

Four of the Chinese cities on the list also had the biggest billionaire growth in 2020. Each of them gained more than 10 net new billionaires:

  • 🇨🇳 Hangzhou: 21
  • 🇨🇳 Shanghai: 18
  • 🇨🇳 Shenzhen: 24
  • 🇨🇳 Beijing: 33

The only other city to gain more than 10 new billionaires in 2020 was San Francisco with 11.

Now sitting at 698 billionaires, China is coming up on the 724 held by the United States. Beijing overtaking NYC could be the beginning of a larger tipping point.

Shifting Tides

Asia-Pacific’s collective 1,149 billionaires are worth $4.7 trillion, while U.S. billionaires are worth $4.4 trillion in total wealth.

Overall, it looks like the wealth tides may be turning as China continues to progress economically and more billionaires become based in the East over the West.

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Money

Visualized: The Richest Families in America

The net worth of the 50 richest families in America combines for $1.2 trillion. Here’s how multi-generational family wealth stacks up in the country.

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richest families in america

Visualizing the Richest Families in America

When we think about the richest people in America, individual names often come to mind like Elon Musk, Jeff Bezos, and Bill Gates. But often, it’s the richest families in America that hold a deeper legacy, and sometimes, even deeper pockets.

The country’s 50 richest families hold a collective wealth of $1.2 trillion. This ranking goes beyond nuclear family units and self-made fortunes, and it instead measures the wealth of multi-generational or extended families.

Our visualization, which leverages the latest data from Forbes, reveals the wealthiest families in America and the enterprises that helped them earn their billions.

Editor’s note on methodology: in this ranking, Forbes leaves out self-made entrepreneurs that appear with their nuclear families on the billionaires list. For example, Jeff Bezos founded Amazon and Rupert Murdoch founded News Corp, but these successes did not come from family wealth that was passed down to them.

Family Matters

Say the name Rockefeller or Vanderbilt, and everyone knows who you’re talking about—but how do these household names hold up in the modern rankings?

Below are the 50 richest families in America, based on net worth:

RankFamilyNet WorthOrigin of Wealth 
#1Walton Family$247.0BWalmart
#2Koch Family$100.0BKoch Industries 
#3Mars Family$94.0BMars Inc. 
#4Cargill-MacMillan Family$47.0BCargill Inc. 
#5Lauder Family$40.0BEstee Lauder 
#6S.C. Johnson Family$37.0BSC Johnson
#7Edward Johnson Family$36.0BFidelity
#8Cox Family$34.5BCox Enterprises
#9Pritzker Family$32.5BHyatt Hotels
#10Newhouse Family$30.0BCondé Nast
#11Duncan Family$22.0BEnterprise Products Partners L.P. 
#12Hearst Family$21.0BHearst Corporation
#13Brown Family$20.4BBrown–Forman
#14Marshall Family$18.5BKoch Industries (6% stake)
#15Butt Family$17.8BH-E-B
#16Busch Family$17.6BAnheuser-Busch
#17Du Pont Family$16.0BDuPont
#18Hunt Family$15.5BHunt Oil and Petro-Hunt
#19Dorrance Family$15.0BCampbell Soup Co. 
#20Ziff Family$15.0BZiff-Davis
#21Cathy Family$14.2BChick-fil-A
#22Stryker Family$14.0BStryker
#23Goldman Family$13.2BReal Estate
#24Rollins Family$13.1BOrkin Pest control
#25Gallo Family$12.4BE&J Gallo Winery
#26Reyes Family$12.0BReyes Holdings
#27Kohler Family$11.7BKohler Co.
#28Mellon Family$11.5BBanking
#29Smith Family$11.3BIllinois Tool Works, Northern Trust
#30Bass Family$10.8BOil 
#31Sackler Family$10.8BPurdue Pharma
#32Johnson Family$10.7BJohnson & Johnson
#33Marriott Family$10.4BMarriott International 
#34Crown Family$10.2BInvestments
#35Hughes Family$10.2B Public Storage Inc.
#36Pigott Family$10.1BPaccar
#37Shoen Family$9.0BU-Haul
#38Fisher Family$8.9BGap Inc. 
#39Jenkins Family$8.8BPublix Super Markets 
#40Chao Family$8.6BWestlake Chemical Corp.
#41(Charles & Rupert) Johnson Family$8.6BFranklin Resources Inc. 
#42Phipps Family$8.6BCarnegie Steel, Bessemer Trust
#43Rockefeller Family$8.4BStandard Oil
#44E.W. Scripps Family$8.4BScripps Network Interactive
#45Bechtel Family$8.3BBechtel
#46Gore Family$8.2BGore-Tex
#47Durst Family$8.1BReal Estate
#48Taylor Family$7.8BEnterprise Rent-A-Car
#49Simplot Family$7.7BSimplot
#50Barbey Family$7.3BVF Corp

The richest family in the U.S. is the Waltons, founders of Walmart. Their net worth adds to an approximate $247 billion, making them also the richest family in the world. Over the last year, they’ve grown their family fortune by $25 billion, equal to nearly $3 million per hour.

Interestingly, the Vanderbilts—the railroad tycoons that were once the richest family in the country in the late 19th century—have been ousted from the rankings entirely. Other notable American families, like Ford and Astor, have lost their place on the list as well.

On the other hand, the Rockefellers still hold their status today, ranked at number 43 with a net worth of $8.4 billion. John D. Rockefeller became America’s first billionaire back in 1916, despite the breaking up of Standard Oil for antitrust reasons.

Building Wealth

Over the last five years, nearly every family on this list has seen wealth increase. Many of the behemoth companies on which these families built their fortunes are staples in America, like Campbell’s Soup, Cargill, Dixie Cups, Estee Lauder, and M&Ms and Snickers.

For example, the South’s beloved fast food chain, Chick-fil-A, was founded by the Cathy family and generated $12.67 billion in sales as of the latest annual data, making it the third most popular chain restaurant in the country.

Some of the newer families to make the list also owe it to the success of their enterprises:

  • The Kohler family: Kohler Co. (manufacturers of kitchenware, plumbing products, furniture, etc.)
  • The Taylor family: Enterprise Rent-A-Car (car rental services)

However, a few families have experienced significant losses since the last Forbes ranking. Here’s a look at some notable net worth decreases:

FamilyCompanyChange in Net Worth from 2015-2020
HearstHearst Corporation$-7.0B
RockefellerStandard Oil $-2.6B
SacklerPurdu Pharma$-2.2B
FisherGap Inc.Negative growth (exact $ amount unknown)
Johnson (Charles and Rupert)Mutual FundsNegative growth (exact $ amount unknown)

Purdue Pharma recently filed for bankruptcy. The Sackler family’s plan is to reformulate the company into a new venture whose profits would go towards the opioid crisis, for which they are largely blamed. It would also cost the family around $4.3 billion directly.

Keeping it in the Family

While some families may have experienced decreases in their wealth, for many this is just a small bump in the road.

Overall, the richest families in America are the keepers of immense wealth that has accumulated over generations. For some, their names are now cultural landmarks across the U.S. and their brands have become synonymous with life in America.

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