BALTIMORE, MD—With Tax Day approaching on April 18 and 73% of Americans thinking that the government does not spend their tax dollars wisely, the personal-finance website WalletHub this week released its 2023 Tax Burden by State report.
Maryland was deemed to have the 7th highest tax burden in the U.S.
In order to determine which states tax their residents most aggressively, WalletHub compared the 50 states based on the three components of state tax burden – property taxes, individual income taxes, and sales and excise taxes – as a share of total personal income.
Tax Burden in Maryland (1=Highest, 25=Avg.):
7th – Overall Tax Burden (9.44%)
31st – Property Tax Burden (2.66%)
2nd – Individual Income Tax Burden (4.21%)
41st – Total Sales & Excise Tax Burden (2.57%)
What’s the relationship between state tax burden and economic growth?
“I suspect that higher tax burdens would cause businesses to relocate to lower-tax states/jurisdictions and inhibit growth, but there may be contrary empirical evidence – for example, high-tax locations like Cal and NYC have had lots of growth. But this is an economic or empirical question more than a legal question, and I think causation might be difficult to determine.”
Gregory Germain – Professor, Syracuse University College of Law
“Many people disagree on the relationship between state tax burdens and economic growth. There are good arguments why, all else equal, a higher tax burden reduces economic growth. On the other hand, there are also strong arguments that certain kinds of public investments – such as in education, transportation, and infrastructure – can increase economic growth, and taxes enable states to make those investments. At the end of the day, the answer probably depends not just on how much a state taxes, but also on how those taxes are structured and what the state spends its money on.”
Jordan Barry – Professor, University of Southern California
The full report can be viewed online at WalletHub here.
More in the video below.
Photo via Pixabay