Report: Va., Md., rank among most fair tax systems

WASHINGTON — No income tax in Texas, no sales tax in New Hampshire: Tax systems vary state-by-state, but some are more fair than others, a new report shows.

WalletHub surveyed 1,050 Americans and asked them what a fair state and local tax system looks like. The personal finance network then ranked the states based on how closely their actual tax systems match what Americans think is fair.

Montana topped the list of the states with the most fair tax systems, followed by Oregon and South Carolina. Two local states landed on the list of the top 10 most fair: Virginia placed sixth and Maryland placed ninth.

Tennessee, Texas and Arizona lead the list of states with the least fair tax systems.

In addition to ranking the states, WalletHub discovered conservatives and liberals agree, for the most part, on what a fair tax system looks like: one that taxes higher-income households at a higher rate than lower-income households.

The report found the poor are most overtaxed in Washington, Illinois and Florida, and the wealthy top 1 percent are the most undertaxed in Wyoming, Alaska and South Dakota. Arkansas, New York and Hawaii overtax the middle class the most.

WalletHub reports, overall, current state and local tax systems are unfair. “While Americans — liberals and conservatives — think a progressive tax system is most fair, virtually every state has a regressive state and local tax structure,” the report’s summary says.

States with the most fair tax systems:

  1. Montana
  2. Oregon
  3. South Carolina
  4. Delaware
  5. Idaho
  6. Virginia
  7. Minnesota
  8. California
  9. Maryland
  10. Vermont

States with the least fair tax systems:

  1. Tennessee
  2. Texas
  3. Arizona
  4. Mississippi
  5. Indiana
  6. Florida
  7. Illinois
  8. Arkansas
  9. Hawaii
  10. Washington

See how other U.S. states rank for fair taxes:

WalletHub

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