Census Bureau Reports on States Tax Burden

Residents of Alabama, New Hampshire, Texas, Tennessee and South Dakota get off the lightest Census Bureau figures show that the amount of state taxes collected for every man, woman and child in these five states was the lowest in the country.

If you live in South Dakota, the state got $1,292 from you. If you live in Connecticut, you paid $3,092. The national rate was $1,967.

The Census Bureau’s annual report covered only state tax collections and did not include those levied by local governments. Because so many state services are often passed on to local governments, economists say a better measure of tax burdens nationwide is a snapshot of both state and local tax collections.

Tax burdens can influence how much additional money middle-income workers must earn to purchase various goods and services, such as a new car or computer, compared to residents in other states. The true cost of goods and services in high-tax states such as New York is greater than in lower-tax states such as South Dakota.

The Census data showed that most Americans paid more in taxes to run their state governments last year. The 50 states collected $559 billion in revenue in 2001, a 3.5 percent increase over the prior year.

California took in more than $90 billion in tax revenue, twice as much as New York, three times the amount in Texas. The lowest state tax collections were in North Dakota, Wyoming, and South Dakota.

Seven states took in less money in 2001 than last year: Michigan, Virginia, Wisconsin, Alabama, South Carolina, Oregon, and Iowa. No state showed a decline in total tax revenue in 2000.

In a sign of economic unrest, state tax collections increased just $11 billion, or 3.5 percent in 2001 compared to an 8 percent increase in 2000. In the 1990-91 recession, states experienced only a 3.3 percent rate of tax growth, the smallest rate of increase since the 2.7 percent increase following the 1957-58 recession.