Tuesday, January 05, 2010

We are Number 1, Tennessee is tops in after Tax purchasing power

This is a very simple analysis but interesting. I simply took the Tax Foundation numbers for total State and Local Tax Burden and then adjusted for Cost of living. This produces a simple index of after tax (State and Local) purchasing power. Using the sources cited below, Tennessee has the highest average after tax purchasing power. The difference is dramatic when comparing Tennessee with Hawaii, New Jersey and California, the bottom three States.


Cost of Living Index by State

Total State and Local tax Burden as % of Personal Income

Index of After Tax (State and Local) Purchasing Power

Tennessee

88.8

8.30%

1.03

Oklahoma

88.5

9.80%

1.02

South Dakota

91.3

7.90%

1.01

Texas

90.9

8.40%

1.01

Arkansas

90.1

10.00%

1.00

Kentucky

90.9

9.40%

1.00

Missouri

91.2

9.20%

1.00

Alabama

92

8.60%

0.99

Nebraska

90.9

9.80%

0.99

Georgia

91

9.90%

0.99

Kansas

91.5

9.60%

0.99

Mississippi

92.8

8.90%

0.98

Indiana

92.3

9.40%

0.98

Idaho

92.3

10.10%

0.97

Iowa

93.6

9.30%

0.97

West Virginia

93.9

9.30%

0.97

Ohio

93.5

10.40%

0.96

North Dakota

95.1

9.20%

0.95

Louisiana

96.9

8.40%

0.95

South Carolina

97.1

8.80%

0.94

Illinois

96.7

9.30%

0.94

Michigan

96.9

9.40%

0.93

Utah

96.9

9.60%

0.93

Wisconsin

96.4

10.20%

0.93

North Carolina

96.9

9.80%

0.93

Wyoming

100.6

7.00%

0.92

New Mexico

100

8.60%

0.91

Florida

101.5

7.40%

0.91

Virginia

99.6

9.80%

0.91

Pennsylvania

100.8

10.20%

0.89

Delaware

101.9

9.50%

0.89

Montana

103.9

8.60%

0.88

Nevada

106.4

6.60%

0.88

Minnesota

102.8

10.20%

0.87

Washington

104.6

8.90%

0.87

Arizona

105.2

8.50%

0.87

Colorado

105.1

9.00%

0.87

Oregon

114.3

9.40%

0.79

Maine

114.7

10.00%

0.78

New Hampshire

118

7.60%

0.78

Massachusetts

118.7

9.50%

0.76

Vermont

119.1

10.30%

0.75

Rhode Island

119.4

10.20%

0.75

Alaska

128.3

6.40%

0.73

Connecticut

125.3

11.10%

0.71

Maryland

126.4

10.80%

0.71

New York

125.8

11.70%

0.70

New Jersey

127.4

11.80%

0.69

California

135

10.50%

0.66

Hawaii

165.3

10.60%

0.54

Cost of Living Index for States - 2009

http://www.ded.mo.gov/researchandplanning/indicators/cost_of_living/index.stm

State and Local Tax Burden by State - 2008

http://www.taxfoundation.org/files/sl_burden_1977-2008-200808072.xls