CA Is The 11th Most ‘Tax-Friendly’ For Middle Class: Study

CALIFORNIA – California is the 11th most tax-friendly state in the country for the middle class. That’s according to a study published Wednesday by the personal finance site GOBankingRates.

State and local income taxes vary from state to state, and some impact middle-class earners more than others. The authors noted not all states are equal when it comes how much residents pay in taxes due to owning property, buying goods and submitting to a personal income tax.

“The best states for taxes, as well as the worst, exist,” the authors said.
Here’s what the authors found for California:

• Total share of state and local taxes paid by middle 20 percent: 8.3 percent
• Share of personal income tax paid by middle 20 percent: 1.2 percent
• Share of property taxes paid by middle 20 percent: 2.5 percent
• Share of sales and excise taxes paid by middle 20 percent: 4.6 percent

"Compared to other states, California’s share of income tax paid by the middle 20 percent is relatively low at 1.2 percent. The lowest 20 percent of earners in the state pay a share of -0.7 percent and the top 1 percent pay a share of 9.8 percent."

The study determined the most tax-friendly states for the middle class by looking at the shares of certain income taxes paid by the middle 20 percent of income earners in 30 states.

Of particular interest, no state in the South — often associated with lower tax rates — cracked the top five most-tax-friendly states for the middle class. And just three managed to crack the top 10.

1. Alaska
2. Delaware
3. Nevada
4. Wyoming
5. Montana
6. Florida
7. Tennessee
8. Idaho
9. South Carolina
10. North Dakota

Alaska ranked as the No. 1 most tax-friendly state for middle class folks. The authors highlighted that the middle 20 percent in Alaska pay the lowest total share of state and local taxes at 4.3 percent. The state also has no personal income tax and has the fifth-lowest share of sales and excise taxes paid by middle class earners at 1.6 percent.

Patch national staffer Dan Hampton contributed to this report; Photo credit: Scott Olson/Getty Images