How can some states ‘afford’ to charge little or no income taxes?

Californians might wonder how other states can “afford” to charge their residents little to no income tax.

Let’s politely say “small government” sometimes gets a lot of help from the biggest government – Uncle Sam.

Income-tax burdens on residents vary widely by state. The federal government’s financial input into local economies also fluctuates across the nation.

My trusty spreadsheet, looking at rankings of state-by-state tax burdens and federal-dollar dependency from WalletHub and SmartAsset, found that low-tax states often get more generous financial inflows from the U.S. government than higher-tax states.

Taxing matters

Let’s note that taxpayers in the 17 states with the lowest individual income-tax burdens pay only an