How does Alabama’s income tax compare to states around the country?

Money

A new map by New York-based accounting firm O’Connor Davies lays out the top marginal income tax rate for every state in the country, and it reveals some interesting data points.

For instance, how do red states stack up against blue states? Using the 2012 election results, The Fix, found that “the average state income tax rate in states (plus D.C.) that Obama won is 6.4 percent, while the average rate in states Mitt Romney won is 4.9 percent.”

No surprise there.

Which states have the highest and lowest top marginal tax rates? California easily has the highest state income tax rate (13.3 percent), while Alaska, Florida, Nevada, South Dakota, Tennessee, Texas and Washington have no state income tax at all (Tennessee’s six percent rate noted on the map is a tax on income from interest and dividends).

Again, no surprises there, with the possible exception of Washington, a state not known for its conservative politics.

State income tax map (Click to enlarge)
State income tax map (Click to enlarge)

As for Alabama, we fall somewhere near the middle of the pack with a 5% state income tax. But two of our neighboring states have no income tax at all (Florida and Tennessee). Our other two neighbors sit at 5 percent (Mississippi) and 6 percent (Georgia) respectively.

Of course, while this map is interesting and at least somewhat revealing, it doesn’t tell the whole story. Some of the states with the lowest income tax find other ways to tax their citizens, like jacking up property taxes.

What do you think about the way Alabama’s taxes are currently structured?


Follow Cliff on Twitter @Cliff_Sims

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