The Tax Foundation publishes data on state taxes as a percentage of personal income (example: Texas). WalletHub has released an alternative ranking that is mostly consistent but potentially interesting. One huge discrepancy in the two data sources is New Jersey, which Tax Foundation says is one of the least efficient states, consuming 12.3 percent of residents’ income, while WalletHub says that only 10.4 percent is siphoned off. It may be that different years are used in the calculations, but the discrepancy seems too large to be explained by that.
WalletHub shows the Vermont/New Hampshire border to be perhaps the most dramatic, with Vermont taking 11.13 percent and New Hampshire down at 6.88 percent.
I wonder if these data are accurate. New Hampshire is shown as collecting 1.41 percent of residents’ income via a “sales and gross receipts tax” yet the state doesn’t have a sales tax. Could this be fees?
It would also be worth adding in something about state services. Florida, for example, has low taxes but also low college tuition (collegeboard.org) and excellent public schools when adjusted for student demographics (nytimes). (Also, Florida is a wonderful place to be an alimony plaintiff, assuming that the governor vetoes a recently passed law.) Texas is not quite as great as it looks to start with if you’re going to send a bunch of kids to a four-year state college, though the same nytimes story indicates that the public schools are great (don’t move and subject yourself to Texas family law if you want to make money from child support (capped) or alimony (the polar opposite of Florida’s “permanent alimony” system)). New Hampshire has comparably low taxes to Florida but in-state tuition at a four-year state university is more than 2X what Florida charges. Vermont is off-the-charts bad if you consider the high taxes and also the crazy high college tuition (they are too busy admiring Bernie Sanders to watch how their own tax dollars are being spent?).
My guess is they may be counting (for example) NH’s 9% Rooms&Meals tax as a sales tax. There are a number of these little gotchas where the state demands its cut of a commercial transaction, even though there’s no broad-based sales tax.
We have a rooms and meals tax in NH. We also have annual town tax/fee on auto registrations (instead of a one time sales tax) that might be in there. And a real estate stamp. All those are sales or asset type taxes.
The NH meals and rooms tax raises a significant amount of revenue from tourists, alcoholics, and political campaigns.
In my experience colder climates make running everything more expensive and require more infrastructure maintenance. Nordic countries are as expensive as they are for many reasons, and high heating/building/maintenance costs are a good part of them.
The New Jersey/Delaware is slightly bigger difference. 10.38% vs 5.91%