Tax Bite Big in Maine, Small in Alaska

By: - April 15, 2003 12:00 am

Alaska and Maine are far apart geographically, but their tax burdens represent an even bigger divide — Maine residents have the nation’s highest state and local tax burden, 12.2 percent of income, while Alaska residents have the nation’s lowest, 5.5 percent.

The tax burden calculations come from the Tax Foundation, a conservative lobbying group in Washington, D.C. It released its report to call attention to the issue at a time when many Americans are mindful of taxes because of the April 15 Internal Revenue Service deadline for filing tax returns.

Besides Maine, the foundation said other high-tax states include New York with a 12 percent tax burden and Minnesota, where 11 percent of a taxpayer’s income goes to local and state governments.

Alaska is joined at the bottom of the ranking by New Hampshire, which has a 6.6 percent tax burden, and Delaware, with a 7.3 percent burden.

North Carolina claims middle ground with a 9.5 percent tax burden and 25th place in the rankings.

One reason for Alaska’s low-tax position is that it gets much of its revenue from oil taxes, which are paid in large part by residents of other states, said Tax Foundation. spokesman Bill Ahern.

A similar phenomenon occurs in Florida and Nevada, which shift much of their tax burdens out of state by taxing tourists heavily, he said. This enables them to hold down taxes on their own residents. Nevada’s tax burden ranks 41st; Florida’s 44th. 

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