In Fiscal Year (FY) 2015, Indiana collected $24.9 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Indiana taxpayer can afford this level of taxation.
As shown in Chart 1, Indiana’s state and local tax burden (tax collections divided by private sector personal income) was the twelfth lowest in the nation for FY 2015 at 12.8 percent—or -11 percent below the national average of 14.4 percent.
As shown in Chart 2, Indiana’s tax burden has increased over time by 62 percent to 12.8 percent in FY 2015 from 7.9 percent in FY 1950.
As shown in Chart 3, Indiana’s 12.8 percent tax burden is greater than these combined industries: retail trade (6 percent), construction (5.9 percent), and mining, quarrying, and oil and gas extraction (0.3 percent).
Indiana’s lower than average state and local tax burden is helped by a low property tax burden (3.2 percent, 9th lowest).
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Indiana—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The Indiana counties/cities with the highest local government tax burden include:
The Indiana counties/cities with the lowest local government tax burden include:
Note: Martin County is excluded since most of the land is owned by the federal government via the Naval Surface Warfare Center Crane Division and Hoosier National Forest.
Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 65 years! See if your state has been above or below the national average?
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.