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Report: Area Residents Hold Heavy State, Local Tax Burdens

Published: Tuesday, April 29, 2014 3:43 p.m. CST

By Paul Tooher

Residents of Chicago shoulder one of the highest state and local tax burdens in the nation, according to an annual study released by the Office of the Chief Financial Officer of the District of Columbia.

And in Chicago, the burden is heaviest on those with the lowest income.

The report looks at the estimated property, sales, auto and income taxes for a hypothetical family at five income levels in 2012, the most recent figures available, in the largest city within each state.

For a hypothetical family of three with an annual income of $25,000, Chicago has the second-highest tax burden in the nation, paying $4,128 or 16.5 percent of their annual income in state and local taxes.

Only residents of Honolulu at that income level bear a higher burden, at $4,232 or 16.9 percent of their annual income.

The situation improves for the typical family of three earning $50,000 annually. Chicago ranks ninth in the category, with an annual tax burden of $5,968 or 11.9 percent of income.

For those earning $75,000 or $100,000, taxes take an even smaller share of a family’s income. Chicago ranks 10th and 12th respectively for those groups, with a family paying 12.5 percent and 12.2 percent respectively of their income in state and local taxes.

On average across all income levels, residents of Bridgeport, Conn., shoulder the highest local and state tax burden, with families earning $25,000 paying $4,001 annually, the fourth highest in the nation, while those with incomes of $150,000 pay $33,208, the highest in the nation. Homeowners there have a median home value of $148,800, according to Zillow.

Other cities on the top 10 tax-burden list include Philadelphia, in second place, followed by Milwaukee, Baltimore, Columbus, Ohio, Providence, R.I., Portland, Me., Louisville, Ky., Detroit and Wilmington, Del.

Residents of Cheyenne, Wyo., on average have the lowest tax burden of any major city in America. Wyoming has no state income tax, while its tax on gasoline is among the lowest in the nation. In addition, Cheyenne has one of the lowest effective property tax rates in the nation.

Las Vegas has the second lowest tax burden, followed by Billings, Mont., Anchorage, Alaska, Sioux Falls, S.D., Jacksonville, Fla., Seattle, Honolulu, Birmingham, Ala., and Houston.

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