LANSING – While Michigan relies on property and business taxes to a greater degree than other states, it ranks 30th overall among all states in terms of actual dollar per capita tax burden, a study by the Senate Fiscal Agency shows.
However, when considering the percentage against personal income that state and local taxes represent, Michigan is dead on the middle, in 25th place.
But the study also shows that the state fares better than many of its nearest neighbors and competitors. The state has a lower tax burden than Ohio, Indiana, Illinois, Wisconsin, Minnesota and Pennsylvania.
Based on the income raised by state and local taxes, the study said, and the state’s estimated population, per capita taxes cost individuals in the state $3,572.
In New York, which ranked first, taxes cost $6,385 per capita and in Alabama, which ranked 50th, taxes cost $2,783.
Minnesota ranked 13th at $4,373, Illinois ranked 15th at $4,087, Wisconsin ranked 16th at $4,005, Pennsylvania ranked 17th at $3,960, Ohio ranked 23rd at $3,774 and Indiana ranked 27th at $3,646.
In terms of their rank based on percentage of income, Michigan stood at 25th at 10.83 percent of total income. New York again ranked 1st at 14.6 percent of income and New Hampshire ranked 50th at 8.69 percent of income.
Pennsylvania, at 26th at 10.76 percent, and Illinois actually fared better, at 27th with 10.63 percent, but again Michigan beat all its other nearest neighbors. Indiana stood at 15th with 11.39 percent, Wisconsin was 10th at 11.65 percent, Minnesota at 13th at 11.23 percent and Ohio stood at 14th at 11.44 percent.
In terms of the state’s sales tax, Michigan ranked 35th overall in terms of its tax rate. While a number of states had lower rates than Michigan’s 6 percent, they also mostly allowed local sales tax rates, which Michigan does not.
In terms of the income tax, Michigan ranked 31st among all the states. The per capita amount individuals paid on the tax was $736.
Considering property taxes, though the state does not fare so well, ranking 14th and paying $1,341 per capita. New Jersey ranked 1st, paying $2,378 per capita, and Alabama ranked 50th with $420 per capita.
And in terms of the state’s business tax, Michigan ranked 22nd, but in that tied with both Indiana and New Jersey. Alaska ranked 1st among business tax burden and North Carolina had the lowest burden, ranking 50th.
The study also showed that total tax expenditures for the state stood at $35.8 billion.
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