Maine’s Take-Home Pay
The following is a concept I’ve been working on that I call Maine’s “Take-Home Pay” which equals Maine’s per capita personal income minus per capita state and local taxes.
In 2008, Maine’s per capita personal income was the 29th highest in the country at $36,368 for every man, woman and child in the state. However, Maine’s per capita state and local taxes was the 14th highest in the country at $4,424–the ranking would be higher if you were to exclude Alaska and Wyoming which rely heavily on oil severance taxes.
Thanks to Maine’s high state and local taxes, the end result is that Maine’s take-home pay ranks as only the 33rd highest in the country at $31,944 (36,368 in income minus $4,424 in taxes).
Of course, it doesn’t have to be this way. Consider that New Hampshire’s per capita personal income ($43,423) ranks as the 10th highest in the country, but their take-home pay ($39,751) ranks as the 8th highest thanks to their significantly lower per capita state and local taxes ($3,671) which ranks as the 31st highest in the country.
Addendum: Another way to understand Maine’s tax burden is to look at state and local taxes as a percent of personal income. In FY 2008, Maine’s state and local taxes as a percent of personal income was 12.6 percent which is the 6th highest level in the country.