Erin Norman is the Lee Family Fellow and Senior Director of Communications Strategies at State Policy Network.

On Monday, Americans had to pay up their share of federal income taxes for 2023. This year the federal government expects to collect $2.5 trillion from individual income taxes. But that staggering number only tells part of the story. In addition to federal income taxes, states levy their own taxes including income, sales, property, and a variety of other taxes.  

The Tax Foundation has calculated the total burden of these additional state and local taxes— coming to an average of 10.6%, although the range is quite broad with Alaskans having a total state and local tax burden of just 4.6% compared to New Yorkers paying 15.9% on state and local levies. This is on top of the average federal rate of 14.9%. A typical American is paying over one-quarter of their income in taxes. 

In this context, it is not surprising that overall tax burden seems to have an impact on moving across state lines. In 2023, the states with the highest outbound net migration—New York, California, and Hawaii—were all top five states for overall state and local tax burden. There is a moderate correlation (-0.43) between the total inbound migration to a state and the state’s top marginal tax rate, but tax policy explains only a small part of overall migration patterns. 

A recent Associated Press/NORC survey provides more context. While a majority of Americans think they pay too much in taxes at every level of government, a sizable minority believe the amount they pay is the right amount in state sales taxes (46 percent) and local property taxes (39 percent). The survey also found that over half of respondents would like to either keep state tax and service levels the same (40 percent) or pay even more for a greater number of government services (15 percent).  

Some Americans are put off by large tax burdens while others don’t mind paying high tax rates if they feel they get value in return. The American system of government allows state and local communities to set their own policies and for migration that lets citizen settle where policy best matches their personal outlook. To that end, the federal government should reduce the overall tax burden it imposes in favor of letting states collect taxes, and provide services, in line with the desires of local communities.