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LOVE YOUR MONEY: NJ ONE OF THE HIGHEST TAXED STATES IN THE NATION

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(The Center Square) – Marked with higher than the U.S. average in sales, gas, and real estate taxes, New Jersey ranked among the states with the highest amount of overall taxes in the country in a recent analysis.

WalletHub, a personal finance website, ranked New Jersey No. 42 in its analysis of states with the lowest tax rates.

According to WalletHub researchers, 12.84 percent of a median household’s earnings in the Garden State go toward state and local taxes, compared to 5.84 percent in Alaska, ranked as the state with the lowest taxes, and 15.01 percent in Illinois, the state with the highest rate of taxation.

A median household, according to WalletHub, is defined by the national average income of $63,218 annually.

WalletHub used different metrics before assigning the total rank. In some instances, New Jersey was at or near the bottom on the lowest taxed states.

In one particular metric, factoring in annual state and local taxes on a median household, New Jersey was last, with an annual $11,906, on average, being shelled out to both units of government. In the metric, Montana had the lowest amount of taxation – $4,301 – on a median household within the state.

New Jersey ranked among the highest taxed states in a number of specific areas, according to CustomEssayMeister.

Of the 50 states and Washington, D.C., New Jersey ranked as the fourth-highest for its gas tax. In October, the state’s gas tax rose nearly 9 cents per gallon, from 41.4 cents per gallon to 50.7 cents per gallon.

New Jersey also was ranked the state with the highest real estate tax rate, which stands at 2.42 percent, compared to the national average of 1.07 percent.

While state and local taxes in New Jersey and most other areas in the northeast portion of the country are higher than the national average, a panel of experts in the WalletHub report said the figures do not necessarily paint a negative portrait of the region.

“One size does not fit all. The entire package must make sense,” said Richard Pomp, a professor at the University of Connecticut School of Law. “There will never be an influx of retirees to Alaska, even though they do not have an income tax.”

But other experts opining in the analysis said state leaders should consider tax policies and how they stack up with other areas of the country.

“In general, lower taxes attract people to a state,” said Rick Hatfield, chair of the Culverhouse School of Accountancy within the University of Alabama. “Currently, we see people moving from high-tax states … to tax-free states like Texas, Tennessee and Florida.”

In the overall analysis, New Jersey performed better than several nearby states on its general tax rate. New York was ranked the third highest taxed state, at No. 49, and Pennsylvania was the fourth highest, at No. 48.

published here with permission

 

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