New Yorkers Have Highest Tax Burden in the U.S.

New York state residents have the highest state and local taxes as a percentage of income in the United States, while Alaskans have the lowest tax burden, according to a report on Tuesday by the Tax Foundation.

The nonpartisan research organization found that in fiscal 2010, New York residents paid 12.8 percent of their incomes in the taxes, while in Alaska, the taxes accounted for only 7 percent of incomes. In fiscal 2009, New York ranked just behind New Jersey on the high end of taxes, while Alaska was the lowest.

For the entire country, state and local taxes accounted for 9.9 percent of income, up slightly from 9.8 percent in fiscal 2009 but down from 10.3 percent in 1977, the foundation reported.

Other high-tax states in fiscal 2010 were New Jersey at 12.4 percent, Connecticut at 12.3 percent, California at 11.2 percent and Wisconsin at 11.1 percent. Low tax states were South Dakota at 7.6 percent, Tennessee at 7.7 percent, and Louisiana and Wyoming at 7.8 percent.

The foundation said it estimates the average total tax burden for each state’s residents, including in-state and out-of-state taxes paid.

“Some states are able to shift significant portions of their tax burdens to nonresidents, with Alaska being the most aggressive,” said Tax Foundation economist Elizabeth Malm in a statement.

She added that Alaska uses its taxes on oil extraction “to export over 75 percent of its tax collections to residents of other states.”

Other states like Nevada and Florida lower the tax burden of their residents by taxing out-of-state tourists, according to Malm, while on a nationwide basis more than a quarter of all state and local taxes are collected from nonresidents.