Iowans pay 9.3 percent of income for local, state taxes

State ranks 29th in having highest tax burden in the country

George Ford
Published: April 3 2014 | 2:49 pm - Updated: 7 April 2014 | 3:09 pm in

Iowans pay a smaller share of their collective income for state and local taxes than the national average -- but not by much.

An annual report from the nonpartisan Tax Foundation shows Iowa taxpayers paid 9.3 percent of their collective incomes in state and local taxes in 2011, the most recent year for which data is available. The national average was 9.8 percent.

That ranks Iowa as having the 29th highest tax burden in the country, according to the Tax Foundation.

Residents of New York, New Jersey, and Connecticut had the highest state-local tax burdens as a share of income in the nation. In those states, residents have handed over 11.9 percent of their collective incomes for state and local taxes.

At the other end of the spectrum, Wyoming residents at 6.9 percent paid the lowest percentage of income for local and state taxes in 2011. They replaced Alaska, which had previously been the least-taxed for multiple decades, as the lowest-burdened state in the nation.

Liz Malm, Tax Foundation economist, said state and local tax burdens are very close to one another and slight changes in taxes or income can translate to seemingly dramatic shifts in national ranking. The 20 mid-ranked states, ranging from Oregon (16th) to Georgia (35th), only differ in burden by just over a percentage point.

"States have different tax burdens, just as they have different levels of services," Malm said. "For Americans to make informed judgments about benefits and costs of state and local government, the costs need to be known.

"This annual estimate of how much residents pay in state and local taxes helps inform that discussion."

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