A study published by the financial site Wallet Hub indicates that Montana has the 3rd lowest tax rate in the whole country.
KGVO spoke with Wallet Hub analyst Jill Gonzalez, who provided details on the study.
“Tax season can obviously be stressful for many Americans, and low income taxes don’t always mean low taxes overall,” Gonzalez began. “We really wanted to compare not only income, but also real estate, sales tax, and all types of taxes to see where the lowest effective tax rates are, and Montana has the third highest tax rate. lowest tax, at just over 7%.
For those of us who are suffering from increased property taxes in Missoula, Wallet Hub included property taxes in their calculations, however, they used a median sale price of only around $217,000, which is less than half the average price of a home in Missoula.
“It’s a very simple ranking from lowest to highest taxes, and that’s all types of taxes,” she said. “So Montana, because it has very low or no taxes in some ways, that’s why it’s ranked so well here. In fact, right now Montana is about 35 % to the state and US average in terms of taxes.”
Gonzalez said states with higher taxes provide more services to their residents.
“In general, higher-tax states tend to provide the best government services, whether it’s the public healthcare system, public K-12 school systems, even infrastructure,” a- she declared. “So it’s a bit of a trade-off here. There’s definitely a trade-off between lowering your taxes and the kinds of government services you can expect for that money.
Gonzalez counted the states with the highest and lowest tax burden.
“Illinois has the highest tax rate, at over 15%,” 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%, Delaware at just over 6%, followed by Montana in third place with just over 7%.
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