Compared to Other States, How Much Does Louisiana Pay in Taxes?
This year, Uncle Sam will take his cut of America's earnings on May 17, and one month later (Louisiana included) in states affected by March's deep freeze. Many taxpayers are undoubtedly wondering how this year’s Tax Day will affect their finances, as a lot of people are struggling financially as a result of the pandemic. And since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted.
According to the personal finance website, WalletHub, one simple ratio known as the “tax burden” helps cut through the confusion. Unlike tax rates, which vary widely based on an individual’s income, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. And folks in some states pay way more than others.
To determine the states with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens - property taxes, individual income taxes and sales and excise taxes - as a share of total personal income in the state.
Well, congratulations Louisiana! According to these metrics we rank #19 out of the 50 states. What that means is that we here in the Pelican State in the top third of Americans taxed by their government at all levels.
Here's the breakdown. Despite complaining about rising property taxes, when compared to the rest of the US, Louisiana's home owners have it pretty easy, as the state ranks 45th out of 50 in property tax rates.
And in individual tax burden, we're still pretty far down the list at 38. What, then, is the reason that the state ranks 19th overall? It's sales and excise tax.
When it comes to taxing it's citizens and businesses for doing business, Louisiana ranks 5th highest overall. And that's no real surprise. Here in Shreveport the combined sales tax is 9.05%. In Bossier it's 9.45%. And business owners constantly complain about the cost of regulation and taxation, including the state's inventory tax, which annually charges business owners for "tangible personal property."
Highest Overall Tax Burden by State:
1) New York
Lowest Overall tax Burden by State:
5) New Hampshire
To see the complete WalletHub study and to get a close look at each state, including Louisiana's #19 tax burden ranking, JUST CLICK HERE!