James:
I noted the snippet [from the recently released book Rawles on Retreat and Relocation] about tax burden by state recently on SurvivalBlog. This is a topic that has always confused me. You can find this kind of information in several places online, but it is often contradictory and it is very difficult to figure out how they come up with the numbers. I have lived most of my life in New Mexico, Colorado, and Wyoming. In Wyoming, we had no state income tax, limited sales tax (5% state and a max of 1% local, if I recall correctly), and property taxes were 1/3 to 1/2 of what we paid in
Colorado, based on property value. Wyoming seemed much cheaper to live in, as far as cost of government, than Colorado, yet Colorado is often listed as being a very advantageous state to live in as far as total tax burden. Both Wyoming and Colorado generate a lot of severance tax income on natural resources; probably far more per capita in Wyoming. Are these or other corporate taxes figured in somewhere? Where does this disparity come from? Dang it, Jim, I’m a doctor, not an economist! – Simple Country Doctor
JWR Replies: The source on those lists at was The Tax Foundation, based on 1997 data from the Bureau of Economic Analysis. (Sorry that I couldn’t find anything more recent. It is one of the oldest pieces of data in Rawles on Retreat and Relocation.) I agree that some of these list can be highly subjective. For this type of calculation someone must make an assumption about a “typical” state resident’s income, their house and car values, how much gasoline they buy annually, and how much they would spend each year on taxable purchases. Generally taxes on mining and oil wells are not included. (Although there must be indirect “pass though” of taxes, in the form of higher purchase prices.) Nor are corporate taxes factored into these calculations. There are of course individuals that are “corporations.” For example I wouldn’t be surprised to hear that more than half of the doctors and lawyers in the country have incorporated for various reasons