Though the business community and their allies among legislators have long painted Louisiana as having a crippling tax burden, BestPlaces.net doesn’t think so.
In fact, after sifting through all the taxes paid by an individual making about $60,000 per year – including income, property, auto, retail sales, local levies, and other taxes – BestPlaces ranks Louisiana as the nation’s 8th most tax-friendly state. The state has a 6.9% effective rate when all those taxes are added together.
Of the top eight friendliest states, only North Dakota and Louisiana have state income taxes. “Louisiana has some of the lowest state income taxes, real estate taxes, and auto taxes in the U.S. but the second-highest sales taxes in the country,” according to the analysis. Plus, social security income isn’t taxed by the state.
BestPlaces is an Oregon-based data company that compiles and compares data for real estate, marketing, industrial site selection and other firms.
For comparison, the number one tax friendly state as ranked by Bestplaces.net is Wyoming, which has an effective tax rate of 4.8%. Wyoming has no income tax or sales taxes and low real estate property taxes. Instead, the state relies on severance and commercial taxes levied on the mining and oil interests to meet budgetary obligations.
Only about 580,000 people live in Wyoming (about the size of Baton Rouge and New Orleans combined). The Equality State (so nicknamed because Wyoming allowed women to vote years before the rest of the country – Louisiana didn’t ratify the 19th Amendment until 1970) has a state budget of about $9 billion compared to Louisiana’s roughly $30 billion state spending plan.
On tax burden, Louisiana ranks ahead of Alabama (No. 9) and way ahead of Arkansas (No. 20) and Mississippi (No. 23).
Texas, the state Louisiana legislators most want to be like, ranks 15th with an effective 8.48% rate on taxpayers making $60,000 per year. And Massachusetts, the state Louisiana legislators most often point to when unfavorable comparisons are needed, came in 48th with a 16.6% tax rate burden.
The U.S. average is a tax rate of 10.53%.