As the Washington Research Council reported earlier this month, the new state-local tax burden data is out from the Census Bureau. (When dealing with government data, it's important to take a broad perspective whn considering the meaning of "new." The data are for 2008.)For 2007/2008, we have calculated that the per capita tax burden on the
average Washingtonian was $4,354, while the amount of tax revenue
collected per $1,000 of personal income was $105.49. Washington ranked
16th among the 50 states in terms of taxes collected per capita, and
30th in terms of the tax burden per $1,000 of personal income.
It's common to use both measures, as we've written here before. In looking for a handy discussion of the per capita and per $1,000 PI number I came across this clearly written analysis by the New York State Department of Tax and Finance. An excerpt:
Per capita taxes are the dollar amount of total tax collections divided by the population of a state. Measuring state tax burdens by using per capita tax collections can seriously mislead the reader. This measure does not reflect ability to pay tax or the demographic composition of taxpayers. Also, as already mentioned, it does not indicate the amount of state tax paid by nonresident workers and consumers, or exported to the federal government through deductibility (i.e., tax incidence, or “who pays the tax”).
Taxes per $1,000 of personal income are the dollar amount of total collections divided by the personal income of the state’s residents in thousands of dollars. Dividing state tax collections by personal income provides a better indicator because it provides some measure of taxpayers’ ability to pay. However, like per capita measures, it does not show who actually pays state taxes. This measure of tax burden is necessarily imprecise as not all residents pay tax particularly corporate and certain selective sales taxes)
And then, for a very weird description of the measures and what they mean or don't mean there's this incomprehensible bit from the Washington State Labor Council.
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.
To be clear, using personal income to measure tax rates has absolutely nothing to do with consideration of the relative tax rates of different taxpayers at different income levels. NothingI
If - and I'm only guessing here because the WSLC statement is garbled at best - but if they're trying to suggest that the lower ranking on the PI measure has something to do with wealthy people paying relatively less here, they're wrong. It does have something to do with Washington having a relatively larger economy - personal income is a surrogate for the economy - and there's more economic wealth here than, say, Mississippi. One reason the economy is larger: People have invested and created jobs here, in part because we don't have an income tax.
Maybe if the union understood the rankings, it wouldn't be supporting bad tax policy, like I-1098.
