Friday, January 22, 2016

States Collect Over 20 Percent Of Their Taxes From Non-Residents, On Average

From Tax Foundation, "State-Local Tax Burden Rankings FY 2012:"
But it’s important to remember that as taxpayers, we not only pay state and local taxes to our own places of residence, but also to the governments of states and localities in which we do not live.

How is this possible? This tax shifting across state borders arises from several factors, including our movement across state lines during work and leisure time and the interconnectedness of the national economy. What’s really driving this phenomenon, however, is the reality that the ultimate incidence of a tax frequently falls on entities other than those that write the check to the government.
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What is Tax Exporting?

This tax shifting occurs to some degree for nearly all types of taxes, and our tax burden estimates account for these shifts. Our study is particularly interested in how this tax shifting occurs as it relates to state borders, or the shifting of tax burdens from state residents to nonresidents, a phenomenon known as tax exporting.

Chart 1.

Source: Tax Foundation

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