Missouri in Relatively Good Standing

Last week, I was introduced to the Tax Foundation’s Tax Freedom Day report. Aside from being an educational visualization of the confusing tax structure in this country, the report gives a breakdown of total tax burdens by state. A quick look at the map shows that, generally, wealthier states pay more taxes than poorer states. Looking into this relationship, I produced the following chart, comparing the per-capita personal income of each state with the number of days its average resident spends working to pay taxes (click to enlarge):

The relationship between the two inputs is strong, but with a considerable amount of variance and a few outliers. Also, the data itself says nothing of causality. I speculate that richer states are more willing and able to pay higher taxes, although this simplistic chart alone could just as easily suggest (I think incorrectly) that rich states are prosperous because of their higher taxes.

Regardless, the numbers show Missouri’s standing when compared with neighboring states. Residing barely underneath the trend line, Missouri taxpayers make slightly more money than they pay in taxes when compared to all 50 states. Although we spend relatively more in taxes than neighbors Oklahoma and Tennessee, the chart shows healthier proportions than many other nearby states. Missourians should continue striving for a low-tax environment, perhaps looking no further than across state borders for role models.

Sources: Tax Foundation, U.S. Bureau of Economic Analysis and Bureau of the Census
Please note that all data is for 2007. Image created with Microsoft Excel.