Last week the Tax Foundation released a new report highlighting per capita tax collections by state. The data is from Fiscal Year 2021, the most recent year for which full year data is available.
According to the most recent figures, the 10 states with the lowest state and local tax collections per capita were Alaska, Alabama, Tennessee, Florida, Mississippi, South Carolina, Oklahoma, Georgia, Missouri, and Idaho.
Alaska had the lowest collections of the year, totaling to $4,192 of per capita tax collections. Alaska, however, is a unique state. Jared Walczak, Tax Foundation’s vice president of state projects, explains the peculiarity of Alaska, noting that “while the state imposes incredibly low tax burdens on residents, its severance taxes generate substantial revenue that often yield relatively high collections per capita.” This, Walczak notes, allows Alaska lawmakers to “export much of their tax burden.”
The 10 states/jurisdictions with the highest tax burdens, meanwhile, were the District of Columbia, New York, Connecticut, California, New Jersey, Massachusetts, Hawaii, Vermont, Minnesota, and Illinois. With per capita tax collections of $13,278, the District of Columbia took the top spot. This is $3,000 more than the amount collected in New York, which had the second highest per capital tax collections.
Nine of the 10 states with the lowest average per capita tax collections saw net increases in their population over the past three years, with Alaska the lone outlier. Of the 10 states with the highest per capita tax collections, all but one of them (Vermont) experienced domestic net outmigration over the past three years.
The 10 states with the lowest per capita tax collection saw a combined net in-migration of 537,779 people over the past three years, with those new residents earning $107,855,371 the year they relocated. The 10 states with the highest per person tax collections, meanwhile, saw a combined net outmigration of 981,491 people during that same period. Those 981,491 former residents reported annual income of $159,500,128 during the year of their departure.
When reviewing the latest data on comparative state tax burdens and pairing that with IRS migration data, one fact becomes apparent. Americans are continuing to vote with their feet in favor of states with lower tax burdens.