New data: Nation’s state and local tax burden hits a record high

“The story is that higher incomes equal higher taxes,” Tax Foundation spokesman Brian Phillips said . “The economy is doing very well, so people are making more money.”

The Foundation found residents in Virginia and Maryland are less burdened by local taxes than the nation as a whole.

Virginia ranked 33rd, with residents devoting 10.2 percent of their income toward the taxes. When federal income tax is taken into account, Virginia jumps to 17th, with 32.9 percent of residents’ incomegoing toward taxes. The figures reflect a number of fees state and local governments collect, including property, sales and luxury taxes.

Maryland ranked 23 overall, with 10.8 percent of residents’ income going to state and local taxes. The state ranks 15th when federal taxes are included, with 33.1 percent of Maryland residents’ income going to taxes.

Maryland residents are expected to be less burdened by local and state taxes this year than in years past. The state rated 16 in 2001, when Virginia ranked 38th.

“State burdens have been going up for a long time,” said CBIZ Accounting Director Lawrence Kline, noting the federal government has required states to fund more programs, necessitating more tax revenue. Kline said while some states have lowered their tax rates or taken other measures to alleviate burdens, soaring real estate values, particularly in the D.C. region, have often offset their efforts.

Fairfax County, for example, has a lower real estate tax rate now ($0.89 per $100 of assessed value) than it did five years ago ($1.16 per $100 of assessed value). But average assessed value of residential property has jumped from roughly $321,000 to $543,000. In Montgomery County, the tax rate today has remained relatively constant, but average assessed housing values have jumped from $234,000 to $340,000.

Virginia and Maryland’s 5 percent sales tax rates are slightly below the national 5.32 percent average.

[email protected]