Believe it or not, we’re living in a “moderate tax” state
Time for a bit of perspective on just how heavily taxed we citizens of California are. Based on total state and local revenues as a percentage of all personal income, California ranked 17th (out of 50, for the very remedial among us,) according to the California Budget Project using figures from 2005-2006, the most recent period available for comprehensive state revenue data comparisons.
But how can this be? Aren’t our personal and corporate income tax rates among the highest in the nation? Well, yes, they are, at 4th and 6th place respectively. But you need to look at the big picture when talking about all the ways states and local governments raise monies.
For example: property taxes. The state ranked 36th in state and local taxes as a percentage of personal income in 2006-2007 and 44th in tobacco tax and 39th in alcoholic beverage taxes.
Ah, but our sales tax must be among the highest, no? Well, no. On that score we are pretty much in the middle of the pack in 23rd place.
So which state ranked #1 in the level of all taxes paid compared to all personal income? Alaska. Think oil company profits as part of the contributor to all personal income, and then it makes some sense.
Which state was the least taxed? Need you ask? New Hampshire, of course. Live Free or Die.
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As the most populous state, shouldn’t we expect some economies of scale in government operations? Being in the top half in tax burden tells me California is definitely in the bottom half in terms of governmental efficiency.