Our intern, Nikolai Riabov, recently posted on this blog a table comparing state and local taxes by state based upon the Census Bureau’s 2008 survey of government finances. The state Department of Revenue has just released a research report—Comparative State and Local Taxes 2008—using this same data.
DOR’s calculations agree with ours: For the Census Bureau defined 2007–2008 fiscal year, dividing total state and local taxes in Washington by the state’s population gives the ratio $4,354 per capita. Ranked by this ratio, Washington is 16th among the states. Dividing Washington’s total taxes by state personal income gives $105.49 per $1,000 of personal income. Ranked by this ratio, Washington stands 30th.
Folks over at the Washington State Labor Council have been reading the DOR report and make (here) this silly statement about the difference between the per capita and per $1,000 of PI calculations.
Using personal income to measure tax rates takes into consideration the relative tax rates of different taxpayers at different income levels. Measuring tax rates on a per capita basis, however, assumes all citizens are identical, meaning wealthy individuals pay the same in taxes as low-income individuals for purposes of the calculation.
Neither calculation makes any assumption about the way the burdens are distributed among the state’s citizens. Both calculations are simple exercises in arithmetic, intended to facilitate comparison of the level of taxation across states.