In the United States, taxation is an intricate thread woven into the fabric of our societal structure. However, the complexity of the U.S. tax system, with both federal tax obligations and unique state-based taxes, can often lead to confusion. This is intensified by the variations in the rules, reliefs, and types of taxes present on a state-by-state basis. Taxes, albeit viewed as a burden, serve a pivotal role in states' revenue generation, facilitating critical infrastructure development, supporting state programs, and serving other vital roles.
We dive into the realm of state and local taxes, to understand the overall "tax burden" shouldered by inhabitants of different states. The tax burden ratio is a comprehensive indicator that takes into account property taxes, income taxes, and sales and excise taxes to reveal a percentage of total income that residents pay in state and local taxes.
Key findings derived from the data include: