Minnesota pushes Wisconsin down in tax rankingsWisconsin’s state and local tax burden rose slightly in 2011, but its overall rank dropped, according to U.S. Census Bureau figures analyzed by Wisconsin Taxpayers Alliance.
By: Shelley Nelson, Superior Telegram
Wisconsin’s state and local tax burden rose slightly in 2011, but its overall rank dropped, according to U.S. Census Bureau figures analyzed by Wisconsin Taxpayers Alliance.
The drop in rank is directly attributable to changes in taxes paid in Minnesota, which moved from 14th to 8th in terms of taxation.
Wisconsin’s tax burden rose from 11.7 percent to 11.8 percent, but its rank fell from 9th to 10th.
According to the Wisconsin Taxpayer Alliance’s analysis:
In addition to Wisconsin, state-local taxes relative to income rose in 36 other states. Nationally, that percentage rose from 10.7 percent to 10.9 percent. Neighboring Illinois saw its tax burden jump from 10.3 percent to 11.0 percent of income, its rank moving from 27th to 16th. Minnesota’s taxes climbed from 11.3 percent to 11.9 percent of income.
Michigan ranked 24th with 10.6 percent of income going to taxes.
“One interesting phenomenon is the increasing similarity of states in the upper Midwest,” said Todd Berry, president of the nonpartisan, nonprofit tax research organization. “In 2011, ranks for Wisconsin, Minnesota, Illinois, and Iowa were bunched between 8th and 17th.”
Another way to compare state-local revenues is to add to taxes various user fees and charges, such as those for higher education, public hospitals and local sewers.
In 2011, Wisconsin taxes and fees combined claimed 15.2 percent of personal income, 14th highest nationally, versus 15.0 percent, also 14th, during the prior year. Minnesota ranked only slightly better at 15th, with 15.2 percent of income going to taxes and fees.
WISTAX researchers note that while fees are discretionary, taxes are mandatory.
The Census Bureau defines taxes to include several fees such as vehicle registration, drivers’ licenses and several sportsmen’s fees.
In addition to income, some tax researchers compared state taxes based on population. Per capita, state and local taxes here ranked 17th, while taxes and fees combined ranked 18th. Because Wisconsin’s personal income per capita is below average, its tax rankings as a share of income are higher.
In Minnesota, taxes per capita ranked 8th, while taxes and fees combined ranked 9th.
In addition to revenues, the U.S. Census also compares state-local spending. In 2011, direct general expenditures here claimed 22.1 percent of personal income, 20th highest nationally. In 2010, these expenditures accounted for 22 percent of income and ranked 23rd.
The top five states in terms of taxes as a percentage of income include Alaska, North Dakota, New York, Wyoming and Vermont. The lowest taxes were paid in South Dakota, Tennessee, Alabama, Oklahoma and Missouri.
Tax and spending figures for all states are available at www.wistax.org/facts.