Connecticut Residents Face 2nd Highest State-Local Tax Burden in U.S.

In Connecticut, 12.6 percent of all income went toward state and local taxes in Fiscal Year 2012, according to the annual State-Local Tax Burden Rankings released Wednesday morning by the nonpartisan Tax Foundation.

The report highlights the state-local tax burden on taxpayers in each of the 50 states, details how much residents pay to their state and other states, and illustrates tax burden trends over time and within each state.

Here is a breakdown of Connecticut’s state-local tax burden:

• State-Local Tax Burden rank: 2nd
• Percent of income in Connecticut that goes to state and local taxes: 12.60 percent
• Amount of taxes paid to Connecticut per capita: $5,516
• Amount of taxes paid to other states per capita: $2,354

Connecticut was beaten by No. 1 New York, where residents faced the highest burden, with 12.7 percent of income in the state going to state and local taxes. Connecticut and New Jersey at 12.2 percent followed closely behind. On the other end of the spectrum, Alaska at 6.5 percent, South Dakota at 7.1 percent and Wyoming at 7.1 percent had the lowest burdens.

“There’s an ongoing debate over how much is enough when it comes to taxes, but it isn’t always informed by accurate data,” said Tax Foundation economist Nicole Kaeding. “Our study gives taxpayers a comprehensive look at where tax burdens are felt across the states, so that they can have an informed discussion on the size and reach of state and local taxes.”

The study’s key findings include:

• During the 2012 fiscal year, state-local tax burdens as a share of state incomes decreased on average across the U.S. Average income increased at a faster rate than tax collections, driving down state-local tax burdens on average.
• On average, taxpayers pay the most taxes to their own state and local governments. In 2012, 78 percent of taxes collected were paid within the state of residence, up from 73 percent in 2011.

The Tax Foundation is the nation’s leading independent tax policy research organization. Since 1937, its research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels.

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