Wallet Hub – Montana has the 3rd Lowest Tax Rate in the Country
A study released by the financial website Wallet Hub states that Montana has the 3rd lowest tax rate in the entire country.
KGVO spoke to Wallet Hub analyst Jill Gonzalez who provided details of the study.
“Tax season obviously can be stressful for a lot of Americans and low income taxes don't always mean low taxes as a whole,” began Gonzalez. “We really wanted to compare not only income but also real estate, sales tax and every type of tax to see where the lowest effective tax rates are, and Montana has the third lowest tax rate at just over 7 percent.”
For those of us suffering under increasing property taxes in Missoula, Wallet Hub did include property taxes in their computations, however, they used a median home sale price of only about $217,000, less than half the average price of a home in Missoula.
“This is a very straightforward ranking of the lowest to highest taxes, and that’s every type of tax,” she said. “So Montana, because it has either very low or non existent taxes in some of these regards, that's why it did rank so well here. In fact, right now Montana is around 35% lower than the state and US average in terms of taxes.”
Gonzalez said states with higher taxes do provide more services for their residents.
“Generally, the higher tax states tend to provide the best government services, whether we're talking about the public health care system, the public K through 12 school systems, even infrastructure,” she said. “So that is kind of the trade off here. There is certainly a trade off between just how low your taxes can get and the types of government services that you can expect for that money.”
Gonzalez counted off the states with the highest and lowest tax burden.
“Illinois has the highest tax rate at over 15 percent,” she said. “Other northeastern states like Pennsylvania, New York and Connecticut are all very close to that number. The states with the lowest effective tax rates were Alaska at just under 6 percent, Delaware, just over 6 percent and then Montana at third with just over 7 percent.”
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