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How Would the ‘Fiscal Cliff’ Affect State Tax Burdens?

What do the potential tax increases set take effect in 2013 mean in terms of state tax burdens? A new report offers some insight.

You’ve by now heard about the infamous “fiscal cliff” and the tax increases set to take place in 2013. For more information on these potential increases, see What Does the ‘Fiscal Cliff’ Mean for your Personal Tax Burden? and Critical Tax Issues that MUST Be Addressed in 2012.

But what do these tax increases mean in terms of state tax burdens?

The Tax Foundation recently issued a report to help answer this question. The report is designed to illustrate the potential impact of the scheduled 2013 tax hikes on typical families in each state.

According to the report’s data, every state faces a tax increase as a percentage of income with the potential increases ranging from 4.32% to 6.82%. Some states potentially fare better than others, however. The following two tables list the top and bottom 10 states in terms of potentially increased tax burdens.

For a full state-by-state breakdown and more information on the data used to compute these figures, be sure to check out the full report on the Tax Foundation’s web site.

Top 10 States
State Median Household Income for Four-Person Family (2011) Tax Increase 2011 to 2013 Tax Increase as % of Income Rank
New Jersey $101,682 $6,933 6.82% 1
Maryland $106,707 $7,194 6.74% 2
Connecticut $100,451 $6,653 6.62% 3
Massachusetts $101,523 $6,632 6.53% 4
New Hampshire $97,441 $5,660 5.81% 5
North Dakota $84,896 $4,825 5.68% 6
West Virginia $65,403 $3,612 5.52% 7
South Dakota $72,460 $3,997 5.52% 8
Arkansas $55,444 $3,056 5.51% 9
Mississippi $58,047 $3,108 5.36% 10

 

Bottom 10 States
State Median Household Income for Four-Person Family (2011) Tax Increase 2011 to 2013 Tax Increase as % of Income Rank
Maine $78,310 $3,489 4.46% 41
Iowa $76,777 $3,383 4.41% 42
Nebraska $75,495 $3,289 4.36% 43
Delaware $83,424 $3,622 4.34% 44
California $74,122 $3,212 4.33% 45
Illinois $79,138 $3,417 4.32% 46
Kansas $74,853 $3,227 4.31% 47
Colorado $85,027 $3,646 4.29% 48
Hawaii $82,973 $3,453 4.16% 49
Washington $81,582 $3,362 4.12% 50

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.