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Property Tax Blues: Democratic States Pay Higher Taxes

There might be some truth to the label of “tax and spend” Democrats.

A WalletHub analysis of each state’s property taxes showed Blue States have 39 percent higher real-estate property taxes, averaging $2,280, than Red States, averaging $1,642. States were labeled according to the results of the 2012 presidential election, WalletHub’s analyst Jill Gonzalez tells Marketing Daily.

The average American household spends $2,127 on property taxes each year, according to the U.S. Census Bureau. However, the National Tax Lien Association has found as much as $11.8 billion in property taxes goes unpaid each year.

Property taxes also can be a motivating factor when people consider where they want to work and live, Gonzalez said.

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“People often equate taxes to the goods and services their state and community is able to provide,” she said. “Thus, prospective residents wonder if they’re indeed getting what they pay for.”

WalletHub’s analysts compared the 50 states and the District of Columbia U.S. Census Bureau data to determine real-estate property tax rates. They divided the median real-estate tax payment by the median home price in each state. The resulting rates were used to obtain the dollar amount paid as real-estate tax on a house worth $175,700, the national median value for a home, according to the Census Bureau.

New Jersey has the highest real-estate taxes, $4,029, which is eight times more expensive than in Hawaii, the state with the lowest, $489. The complete state listing is available here.

Additionally, 27 states levy some form of vehicle property tax, with an average payment of $412. Of those states, Rhode Island has the highest, $1,099, which is 13 times more expensive than in Montana, the state with the lowest, $86. Researchers say there doesn’t appear to be a correlation between states with lower property taxes and automobile taxes.

"Most of the states with low property taxes have no vehicle taxes,” Gonzalez says. “For example, Hawaii, which has the lowest property tax, has no vehicle tax.”

To compare the each state’s vehicle property tax rates, WalletHub examined data pertaining to cities and counties constituting at least 50% of a given state’s population and extrapolated this to the state level using weighted averages based on population size. All states used the same vehicle: a 2016 Toyota Camry LE four-door sedan — 2015’s highest-selling car — valued at $23,070.

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