If “fair” tax system sounds like a contradiction in terms, consider that New Jersey ranked 18th on a survey of states with the most — and least — equitable tax structures, according to a recent report by WalletHub, the social media site for financial services.
The natural next question is what constitutes “fair.” To establish a baseline, WalletHub polled 1,050 Americans to see what they think a fair state and local tax system looks like. The company’s analysts then compared public perception to data on the real structure of tax systems in all 50 states. The general trend is that all respondents — whether they identify themselves as economic liberals or conservatives — believe a fair state and local tax system imposes higher tax rates on wealthy households than on lower- and middle-income households.
How did New Jersey do on the specific data points used to come up with its ranking? No surprise, it was graded 49th out of 50 states for dependency on property taxes (1 = least). It scored a seven for sales and excise taxes, and a 17 for reliance on income taxes (state and corporate). When it came to dependency on other taxes, the Garden State took the 11th spot.
Montana was deemed the state with the fairest tax system; Washington was at the bottom. New York ranked 36th; Pennsylvania, 35th.