State & Local Taxation

State and Local Taxation (Log-in Required)

Tax Freedom Day 2013 arrived on April 18. That was the day when Americans earned enough money — $4.22 trillion – to pay the nation’s total federal, state, and local tax bill for the year, according to the Tax Foundation.1 This White Paper examines the state and local share of the bill — $1.45 trillion in 2013 – and the host of sales, income, property, excise, and other taxes, fees, and surcharges behind it.

The average American paid $4,412 – or 9.9% of their income – in state and local taxes in 2010, according to the latest State and Local Tax Burden Rankings from the Tax Foundation. Using Tax Freedom Day as a yardstick, the state and local tax burden is inching lower. It took 36.9 days to pay the state and local share of the nation’s tax bill in 2013 — down from 38 days in 2009.

Yet the figures behind those figures are the real story – the horse-by-committee canvas of taxes and tax breaks that fluctuate from state to state, industry to industry, and individual to individual based on the fiscal and political needs and ambitions of the day. Like stacks of blocks in a Jenga game, state and local tax structures tilt as pieces are removed and replaced, creating winners and losers across all sectors – including housing and real estate.