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Virginians Paying More Taxes, But Getting More Benefits?

The Tax Foundation has just published their 18th annual “estimate of the combined state-local tax burden shouldered by the residents of each of the 50 states.” The introduction of this “special report” goes on to say:

“For each state, we calculate the total amount paid by the residents in taxes, and we divide those taxes by the total income in each state to compute a "tax burden" measure.

“We make this calculation not only for the most recent year but also for earlier years because tax and income data are revised periodically by government agencies, and in the case of the current report, we have changed our own methodology to take advantage of new datasets.

“The goal is to focus not on the tax collectors but on the taxpayers. That is, we answer the question: What percentage of their income are the residents of this state paying in state and local taxes? We are not trying to answer the question: How much money have state and local governments collected? The Census Bureau publishes the definitive comparative data answering that question.”

According to the Tax Foundation, “The true measure of the tax burden in any state must include the taxes paid by residents to other states,” which are “(m)uch larger than commonly supposed.” They also found New Jersey residents pay the most, 11.8% of their income, followed by New York residents (11.7%). District residents pay 10.3%, Maryland residents pay 10.8%, and Virginia residents pay 9.8%; the three neighbors ranked 8th, 4th, and 18th, respectively.

For 2008, the total state and local taxes paid per capita are estimated to be:

  • U.S. average     $4,283
  • District              $7,308
  • Maryland           $5,669
  • Virginia             $4,669

The above numbers hide an important fact, however. Table 4 in the special report provides a historical look of the state-local tax burden rankings by state for selected years 1977-2008. The trend for Virginia’s taxpayers is all in the wrong direction. Let’s take a look at a few of those years:

  • 1977    34th
  • 1980    32nd
  • 1985    32nd
  • 1995    29th
  • 2000    23rd
  • 2008    18th

Virginians are paying more in 2008 than in 1977, but are we getting more, or better, government today than in 1977? We report, you decide.

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