If you want to live in the state with the fairest taxes, pack your bags and join me in Montana.
This state’s tax system tops the list in terms of fairness, according to WalletHub’s ranking of state tax systems in the United States. The ranking is based on a survey of what Americans think fair state and local tax systems should look like.
“We believe this is the first ever ranking of state and local tax fairness that matches representative data on what Americans consider ‘fair’ with real data on the structure of state and local tax systems,” WalletHub said.
According to the survey, Americans believe the most fair system is a progressive tax structure — one in which households with higher incomes pay a bigger percentage of their income in taxes compared with lower- and middle-income households.
Based on Americans’ description of fairness and data from each state’s tax system, WalletHub said these 10 states have the fairest taxes:
- South Carolina
Three of the top four fairest tax states– Montana, Oregon and Delaware – don’t have statewide sales taxes, which is really no surprise considering the Americans surveyed said fairer tax systems rely less on sales and excise taxes.
According to what Americans consider “fair,” these are the 10 states with the least fair state and local tax systems:
Other findings include:
- Lower-income Americans are the most overtaxed in Washington, Hawaii, and Illinois. The wealthiest 1 percent are most undertaxed in Wyoming, Nevada, and Florida. The middle class is most overtaxed in Arkansas, New York and Mississippi.
- Although Republicans and Democrats typically agree about the makeup of a “fair” tax system, conservatives tend to support slightly elevated taxes on the poor and lower taxes on the wealthy.
- The majority of Americans — liberals and conservatives — believe a progressive tax system is the most fair, though every state instead has regressive state and local tax structures.
How did your state rank in terms of fairness, according to this definition? Share your comments below or on Facebook page.