Mandi Woodruff and Megan Durisin for Business Insider write: There's no better evidence of the growing chasm between America's rich and poor than state tax rates. On average, the nation's lowest-income residents pay tax rates that are twice as high as the wealthiest 1 percent of taxpayers, according to a new report by The Institute on Taxation and Economic Policy. That includes state, income, property and sales taxes, of which the rich pay 5.6 percent of their income and the bottom 20 percent of earners pay 11.1 percent each year. Using ITEP data, along with data from the Tax Foundations' latest State Business Tax Climate Index, we've compiled a list of the ten states with the best tax rates for the wealthy and, consequently, the largest tax gaps between the rich and the poor.
10. Alabama
Rounding out the best states for the wealthy is
Alabama, one of several Southern states that are overwhelmingly friendly to
high earners.
The wealthiest 1 percent pay just 3.8 percent of
their income in taxes, while the poorest
taxpayers shell out 10.2 percent. The middle class isn't far behind, with 9.4
percent paid in taxes on average.
Individual income taxes: The Tax Foundation ranked Alabama the 18th
best state for income taxes.
Wealthy resident: Marguerite Harbert, widow of the late
construction and energy mogul, John Murdoch Harbert III, is worth $1.4 billion.
9. Indiana
In Indiana, the wealthiest 1 percent of
taxpayers see 5.4 percent of their income eaten up by taxes, while the
lowest earners part with 12.30 percent.
Middle-income residents shell out 10.7 percent
to taxes.
Individual income taxes: The Tax Foundation ranked Indiana the 10th
best state for income taxes.
Wealthy resident: Gayle Cook, member of board of directors of
medical device firm Cook Group, is worth $3.4 billion.
8. Pennsylvania
Pennsylvania's wealthy pay 4.4 percent of their
total income toward taxes,
while the poorest 20 percent pay more than twice that rate –– 12 percent.
The middle class parts with nearly 10 percent of
their take-home pay.
Individual income taxes: The Tax Foundation ranked Alabama the 12th
best state for income taxes.
Wealthy resident: Hansjorg Wyss, chairman of Swiss medical
device manufacturer Synthes Holding AG, is worth $7 billion.
7. Arizona
Arizona has one of the higher tax rates for the
wealthy, but it still only takes 4.7 percent of their income on average.
On the other hand, the poorest residents
pay 12.9 percent of their pay, followed by the middle class, which pays 9.7
percent.
Individual income taxes: The Tax Foundation ranked Arizona the 17th
best state for income taxes.
Wealthy residents: Bruce Halle, Sr., founder of the Discount
Tires empire.
6. Tennessee
Southern states dominate the list of best states
for the wealthy, and Tennessee is no exception.
The wealthiest 1 percent of residents pay just
2.8 percent in taxes, while the poorest 20
percent part with 11.2 percent of their income. Middle-income taxpayers shell
out 8.6 percent in total.
Individual income taxes: The Tax Foundation ranked Tennessee the
8th best state for income taxes.
Wealthy residents: Singer Leanne Rimes and Thomas Frist, Jr.,
founder of the Hospital Corporation of America.
5. Texas
Everything's bigger in Texas, including the tax
gap between the rich and poor.
The state's wealthiest 1 percent, who earn an
average of $1.4 million, pay about 3 percent of their annual earnings in state
and local taxes, while the poorest 20
percent, who earn $11,400, spend 8.5 percent of their income on taxes.
Individual income taxes: The Tax Foundation ranked Texas the 7th
best state for income taxes.
Wealthy residents: More than 30 members of the Forbes 400 have a
Texas address. Among them are Walmart heiress Alice
Walton and Kinder Morgan CEO Richard Kinder.
4. Illinois
In Illinois, the wealthiest 1 percent,
with average earnings of $1.5 million, pay 4.9 percent of their income toward
state and local taxes.
The lowest-earning 20 percent pay 13.8 percent
of their average $10,100 annual salary in taxes.
Individual income taxes: The Tax Foundation ranked Illinois the
13th best state for income taxes.
Wealthy residents: Billionaire real estate investor Sam Zell and
hedge fund billionaire Ken Griffin.
3. South Dakota
South Dakota's richest 1 percent, with an
average income of $1.1 million, pay 2.1 percent of their income in taxes, while the lowest-earning 20 percent, with
average incomes of $11,200, pay five times as much.
Individual income taxes: The Tax Foundation ranked South Dakota No.
1 best state for income taxes (tied with Florida, Alaska, Washington, and
Nevada).
Wealthy residents: No members of the Forbes 400 call South Dakota
home.
2. Florida
The richest 1 percent of Floridians, with an
average income of $1.6 million, pay 2.3 percent of their earnings on taxes while the
poorest 20 percent, making an average of $10,300, pay 13.2 percent of their
income toward taxes.
Individual income taxes: The Tax Foundation ranked Florida the No. 1 best
state for income taxes (tied with South Dakota, Alaska, Washington, and
Nevada).
Wealthy residents: Billionaire William Koch, Donald Trump, and
Carnival Cruises CEO Micky Arison.
1. Washington
Washington is the place to be for wealthy
residents looking for the cushiest tax rates.
The top 1 percent, who make an average of $1.1
million, pay about 2.8 percent of their income toward state and local taxes
each year. But those in the bottom 20 percent of the income bracket, with an
average salary of $11,500, pay 16.9 percent toward state and local taxes.
Individual income taxes: The Tax Foundation ranked Washington the No. 1
best state for income taxes (tied with South Dakota, Alaska, Florida, and
Nevada).
Wealthy residents: Microsoft's Bill Gates and Amazon CEO
Jeff Bezos.
0 comments:
Post a Comment