The Tax Man Cometh: How Does Your State Compare?

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While most Americans focus on federal tax rates, a new report shows the state and local tax burden can be equally painful.

The average tax burden in Connecticut, New York and New Jersey exceeds 12 percent, which is roughly equal to the national federal income tax average of 12.2 percent.

But the lengthy study by the Tax Foundation, a nonpartisan, nonprofit think tank, found more remarkable comparisons between states.

For example, the five lowest tax states, Wyoming, Tennessee, South Dakota, Nevada and Alaska pay about 40 percent less in taxes than the highest tax states, New Jersey, New York, Connecticut, Wisconsin and Rhode Island.

Why the disparity? For Alaska and Wyoming, massive oil and gas revenues make them outliers. Nevada enjoys sizable gaming and tourism income.

But experts say the decisions and political choices of lawmakers also play a role in how much states tax their residents.

"How much lawmakers spend is driven by who elects them," said Tax Foundation economist Marc Robyn. "A small government state, they elect small government type leaders and they won't be spending as much."

There is also a massive disparity among states that are friendly to business. When researchers combined the costs of government regulation and red tape with the total tax burden of income, property, sales, corporate and unemployment taxes, the worst states to do business are New York, California, New Jersey, Connecticut and Ohio. The best are South Dakota, Alaska, Wyoming, Nevada and Florida. Powerhouse Texas comes in at 13.

"Voters can feel like they are being trampled under foot. But if enough momentum builds and people really want to change things they can vote for a lower tax state or move to a lower tax state," said Robyn.

That is easier said than done, but in three states where the tax burden has steadily grown, voters recently elected tight fisted Republican governors who ran on promises of fiscal responsibility.

For example, Ohio and Indiana used to be among the 10 most tax-thrifty states dating back to 1970s. Now they are among the worst, dropping 20 spots in national rankings. Both elected Republicans, along with perennial loser Wisconsin, which ranks among the lower states in per capita income, but fourth highest in taxes.