With higher than average tax rates charged for gas, income, real estate and other categories, Pennsylvania was recently ranked as one of the most taxed states in the country.
In its annual analysis in advance of the April 15 tax filing deadline, personal finance website WalletHub gave the Keystone State a No. 48 finish, placing it ahead of only New York, Connecticut and Illinois.
According to the study, 13.97 percent of a median household’s earnings in Pennsylvania goes toward state and local taxes, compared to lowest taxed Alaska, at 5.84 percent, and Illinois, at 15.01 percent, on the polar opposite of the spectrum.
A median household, according to WalletHub, is defined by the national average income of $63,218 annually.
Pennsylvania was among the highest taxed states in the country for real estate, where it placed No. 41 ($3,442 for a median household) and income tax, a No. 49 finish ($2,663 for a median household).
In terms of gas tax, Pennsylvania also scored a near-bottom finish, ranking No. 50 and coming in ahead of California. Pennsylvania’s gas tax is 58.7 cents per gallon, excluding the additional federal gas tax of 18.4 cents per gallon.
By comparison, Alaska, the state with the lowest gas tax, charges motorists 13.7 cents per gallon. California’s state-specific gas tax is 62.4 cents per gallon.
The WalletHub analysis points to a median Pennsylvania household paying $8,138 in state and local taxes annually, compared to $4,301 in Montana – the state with the lowest in the metric – and highest ranked New Jersey, at $11,906.
While most of Pennsylvania’s rankings were toward the bottom of the analysis, the state did tie with 23 other states in one category. It is one of nearly half of all states not to impose a vehicle property tax.
Public policy experts, including those weighing in on the WalletHub study, have offered varied comments on the impact a specific state’s tax rate has on decisions of where to locate.
Belan Wagner, whose professional resume includes a role as managing partner of a California-based law firm, said Americans should give more consideration to the role taxes play when deciding where to lay roots.
“In my experience, the average person does not give enough consideration to the local and state taxes, which will have to be paid when he or she establishes residence in a state,” Wagner said in a statement. “Several taxes can be levied.”
But Richard Pomp, a professor at the University of Connecticut School of Law, said a number of other considerations also are factored into the equation – particularly within specific age groups.
“A state has to determine its comparative advantage and play off of that,” Pomp said. “A rural area is unlikely to attract high-tech millennials, and cities may not be the first choice of retirees.”
Neighboring states had mixed results in the WalletHub analysis. Delaware achieved a second-place finish in the roundup.
Elsewhere, West Virginia ranked No. 17 as the least-taxed state in the country, followed by Maryland (No. 32), New Jersey (No. 42), Ohio (No. 43) and New York (No. 49).