Alabama Taxes

By: Associated Press
By: Associated Press

In Alabama, the less money a person earns, the greater the percentage that person will likely pay in taxes compared to others with bigger paychecks.



That's according to a new study prepared by the Washington, D.C. based Institute on Taxation and Economic Policy.



The study ranks Alabama's tax system as the 10th most regressive in the country.



The results of the study, which examined tax burdens on a range of incomes for non-elderly taxpaying families in all 50 states, were released at a news conference Thursday in Montgomery.



The poorest 20 percent of Alabama residents pay 10.6 percent of their wages to taxes, including income, sales and property taxes, according to the group's research.



Following the poorest 20 percent of Alabama's population, the middle 60 percent pay 9.6 percent of their wages to taxes.



The wealthiest one percent of Alabama's wage earners pay 4.9 percent in taxes.



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An Analysis of the Tax Systems in all 50 States



By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy.



Nationwide, middle-income families pay almost 10 percent of their earnings in state and local taxes and poor families pay more than 11 percent. But the richest people effectively pay only 5.2 percent of their income in state and local taxes.



Since 1989, state and local taxes have risen on low- and middle-income taxpayers, but have fallen on the very wealthiest.



Ten states — Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama — are particularly regressive. These “Terrible Ten” states ask poor families — those in the bottom 20 percent of the income scale — to pay up to 5.5 times as great a share of their earnings in taxes as do the wealthy. Middle-income families in the “Terrible Ten” states pay up to 3.5 times as high a share of their income as the wealthiest families.



The least regressive states are Delaware, Montana, Vermont and California. These states have progressive personal income taxes and/or low reliance on sales and excise taxes.








Who Pays






























































































































































































































































































































Who Pays?

An Analysis of the Tax Systems in All 50 States


% of income each class pays in taxes
per state

State Poorest

20%
Middle

60%
Top

1%
Alabama 10.6% 9.5% 4.9%
Alaska 3.8 3.0 2.8
Arizona 12.5 9.7 6.6
Arkansas 11.2 10.8 7.8
California 11.3 9.4 10.6
Colorado 9.9 9.2 6.8
Connecticut 10.3 10.4 6.4
Delaware 4.7 5.4 6.9
D.C. 8.4 10.9 8.6
Florida 14.4 9.9 3.0
Georgia 10.9 9.9 7.4
Hawaii 12.6 11.2 8.0
Idaho 9.7 9.3 8.7
Illinois 13.1 10.4 5.8
Indiana 11.7 9.9 6.3
Iowa 10.6 10.4 7.9
Kansas 11.5 10.4 8.0
Kentucky 9.6 10.0 7.8
Louisiana 11.5 9.5 6.0
Maine 10.0 10.2 9.7
Maryland 9.4 9.5 7.6
Massachusetts 8.6 9.2 6.8
Michigan 13.3 11.1 6.7
Minnesota 10.5 10.4 9.3
Mississippi 9.9 9.7 6.9
Missouri 10.0 9.5 7.4
Montana 6.1 7.0 7.2
Nebraska 10.6 10.3 9.4
Nevada 8.3 6.3 2.0
New Hampshire 8.1 5.8 2.4
New Jersey 12.4 9.8 8.2
New Mexico 12.1 10.4 8.7
New York 12.8 12.0 9.1
North Carolina 10.5 10.0 8.8
North Dakota 10.2 9.1 6.5
Ohio 10.9 10.7 9.7
Oklahoma 12.0 11.2 7.9
Oregon 9.4 8.5 8.9
Pennsylvania 11.4 9.1 4.8
Rhode Island 13.0 10.7 8.6
South Carolina 7.9 9.0 2.3
South Dakota 10.0 9.0 2.3
Tennessee 11.7 8.8 3.3
Texas 11.4 8.3 3.5
Utah 11.5 11.0 7.6
Vermont 10.0 9.8 9.7
Virginia 9.1 8.4 7.0
Washington 17.6 11.1 3.3
West Virginia 9.3 9.7 8.7
Wisconsin 10.2 11.9 8.1
Wyoming 7.6 5.4 1.7





Source: http://www.ctj.org/itep/whopays.htm


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