Cato Institute Policy Analysis No. 302
State-by-State Tax Comparison
Alaska
| Employer Costs,
Take-Home Pay, and Tax Wedge for an |
|
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| Average
Manufacturing Wage Worker in ALASKA |
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| |
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Annual |
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| |
Amount |
Rank |
| |
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| |
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| Total Cost to Employer* |
$31,022 |
18 |
| |
|
|
| Take-Home Pay |
$23,072 |
1 |
| Take-Home Pay, % of Employer
Costs |
74.4% |
4 |
| |
|
|
| Tax Wedge* |
$7,951 |
38 |
| Tax Wedge, % of Employer Costs |
25.6% |
41 |
| |
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| Gross Earnings |
$27,200 |
|
| |
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|
| Taxes Withheld from Worker's
Paycheck |
|
|
| Social Security/Medicare Payroll
Tax |
$2,081 |
|
| Federal Income Tax |
$2,048 |
|
| State Income Tax |
$0 |
--- |
| |
----------- |
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| Total Taxes Withheld |
$4,128 |
|
| |
|
|
| Hidden Taxes Paid by Employer on
Worker's Behalf |
|
|
| Social Security/Medicare Payroll
Tax |
$2,081 |
|
| Workers' Compensation
Contribution |
$1,153 |
31 |
| State Unemployment Insurance Tax |
$532 |
2 |
| Federal Unemployment Insurance
Tax |
$56 |
|
| |
----------- |
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| Total Employer-Paid Taxes |
$3,822 |
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| |
|
|
| Employer-Paid (hidden) Share of
the Tax Wedge |
48.1% |
9 |
| |
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| |
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| Source: Dean Stansel,
"The Hidden Burden of Taxation: How the Government Reduces |
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| Take-Home Pay,"
Cato Institute Policy Analysis No. 302, April 15, 1998. |
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*Total
cost to employer does not include the cost of fringe benefits (such as employer
contributions to private health insurance plans and pensions) and tax and regulatory
compliance. The tax wedge does not include the host of other taxes--property taxes, sales
taxes, gas taxes, cigarette taxes, etc.--that workers must pay with their remaining
take-home pay. |
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Last Updated on 4/9/98
By Mark LaRochelle
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