Perhaps reflecting the divergent economic philosophies of the country's three largest state economies, residents of Texas were ranked among the least tax-burdened, according to a new study by the nonprofit Tax Foundation, while New York and California were among the highest taxed states.
According to the study, which evaluated 2009 data, Texans paid income, sales, property and various other taxes at a combined rate of 7.1 percent, placing the Lone Star State at No. 45 on the list.
Meanwhile, residents of New York and California paid a rate of 12.1 percent and 10.6 percent, respectively, affording them the No. 2 and No. 6 spots. New Jersey was the most tax-burdened state with 12.2 percent, and Alaska was the least at 6.3 percent.
"Alaska is able to shift almost 80 percent of its tax collections to residents of other states," said staff economist and study author Mark Robyn. "While taxpayers in 43 states are busy filing state income tax returns in April, Alaskans are instead receiving checks from a multi-billion-dollar reserve fund built up from years of taxes on oil extraction."
The report takes on new meaning amidst ongoing budget debates and a national furor over whether to raise taxes and thus revenue or to cut spending. Either way, the report may convince some entrepreneurs to form an LLC in Texas.
Tags : ca, incorporation news, ny, taxes, tx
Posted: Feb 24th, 2011