By C. M. Schmidlkofer | The Center Square
New Hampshire ranks 46th in the country when it comes to overall tax burden, according to a new analysis.
The Granite State’s property tax burden ranks 46th, individual income taxes at first and total sales and excise tax at 48th according to personal finance website WalletHub’s 2021’s Tax Burden by State report.
WalletHub compared the states in property taxes, sales and excise taxes and individual income taxes as a share of a total personal income in the state.
New Hampshire has no income tax on wages and salaries, according to SmartAsset. However, there is a 5% tax on interest and dividends. The state also has no sales tax. But homeowners in New Hampshire pay the highest average effective property tax rate in the country according to a 2021 WalletHub report.
WebHub financial writer Adam McCann said in the report a tax burden measures the proportion of personal income that residents pay toward state and local taxes, unlike tax rates, which vary based on an individual’s circumstances. Tax burdens aren’t uniform across the United States.
“Since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted,” McCann said.
WalletHub asked Roberta Mann, professor of business law at University of Oregon School of Law about the relationship between state’s tax burden and economic growth.
“If there is a relationship, it is definitely not one-to-one,” she said.
In other words, states with a low tax burden don’t always show higher rates of economic growth compared to states with high tax burdens, she said.
For example, Nevada has a relatively low tax burden (ranked 4 in the WalletHub survey) and the highest growth in GDP, New Hampshire has a high rate of growth in GDP but also high tax burden.
The report indicated that Republican-leaning states have a lower tax burden than Democrat-leaning states, with Blue states overall getting a 19.32% rate compared to Red states at 31.36%.