Delaware is ranked as having the state’s second lowest tax burden, with an earlier report calling into questioning the effectiveness of spending.
In the latest report from WalletHub, the First State ranked 49th out of the 50 states in its overall tax burden. (See map above)
WalletHub’s analysts compared the 50 states across the three tax types that comprise state tax burden — property taxes, individual income taxes, and sales and gross receipts taxes — as a percentage of total personal income in the state.
Aiding Delaware’s low tax burden were low gross receipts and the lack of a sales tax, as well as low property taxes. That offset a higher individual income tax rate.
Delaware also derives a large percentage of revenues from corporate fees and unclaimed property from companies incorporated in the state.
Companies have begun to sue the state claiming the money demanded by the state does not match up with actual unclaimed property in the form of unpaid dividends on stock etc.
The tax burden ranking comes after an earlier WalletHub report put the state near the bottom in return on investment from its tax collections. That report looked at the amount of taxes collected per person in relation to rankings in education, crime, environment, and other areas.
The debate over taxes has continued in the state with the business community and Republicans unhappy about the state not lower tax rates after a “temporary” increase during 2009. Also, the gaming industry is seeking a reduction in the state’s share of gaming proceeds.
The measure, also dating from 2009, moved the state from having one of the lowest shares of gaming revenues to one of the nation’s highest. It also came as the state’s three casinos have faced a build out of casinos in Pennsylvania and Maryland.
In a related note, the Tax Foundation’s Tax Freedom Day (the day when you have paid taxes for the year) will be April 18 in Delaware. It will be April 22nd Pennsylvania, April 28 in Maryland and May 12 in New Jersey.
