As we approach April 15, it’s worth noting whether money, or at least lower taxes, buys you happiness.
In this study, I examine the states with a special measure of tax burden calculations developed by WalletHub, as well as another study done by WalletHub titled the State Happiness Index. And the answer will surprise you.
“To determine which states experience the highest tax burdens, WalletHub compared each according to property taxes, individual income taxes and sales and excise taxes, basing the state’s ‘total tax burden’ on the sum of these as a percentage of the average resident’s income,” writes Hugh Cameron with Newsweek.
Using this measure, Wallet Hub found that Hawaii residents pay 13.3 percent of their income to state and local governments based on measures of income taxes, sales taxes and excise taxes. Rounding out the top five were New York, Vermont, New Mexico, and Maine. Wallet Hub found that Alaska has the lowest tax burden of any state in America, with Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming being among the best.
According to Newsweek, “WalletHub analyst Chip Lupo said ‘It’s easy to be dismayed at tax time when you see just how much of your income you lose. Living in a state with a low tax burden can alleviate some of that stress. Some states charge no income tax or no sales tax, although all states have some form of property taxes and excise taxes.” Is this the case?
Well, Wallet Hub also constructed a State Happiness Index, which involved more than 30 data measures emotional & physical well-being, work environment, and community & environment. States with good rankings have economic stability, access to quality health care, community involvement, job satisfaction, and mental health resources. Their rankings can be found at the World Population Review.
Guess who is number one in the Happiness Index? According to Southwest Journal, “Hawaii ranks as the happiest state, achieving an impressive score of 69.58. This high ranking can be attributed to optimal emotional and physical health, as evidenced by low levels of adult depression and notable income growth.” Following Hawaii, Utah, Minnesota, and New Jersey also feature prominently in the US state happiness ranking list 2025, driven by strong work environments and cohesive community dynamics. Each state’s unique contributions to happiness highlight the influences of different metrics, such as economic stability and social engagement.”
I put the data into an Excel spreadsheet, and this is what I found. Three of the top 10 tax burden states are in the top four for happiness rankings. Only two of the lowest 10 tax burden states can be found in the top 10 of the State Happiness Index: New Hampshire (8th) and Idaho (10th). Three more of the top 20 tax burden states can be found in the top 10 of happy states. In fact, eight of the top 10 happy states are among the top 21 for tax burdens.
Remember how Alaska has the lowest tax burden of any state. They’re 46th in the State Happiness Index, one spot in happiness below Tennessee, with the third lowest tax burden of any state. Only one high tax burden state (New Mexico) can be found in the bottom 10 for happiness (New Mexico, which is still doing better than Alaska and Tennessee).
Only one other state is in the bottom 15 for happiness.
So having lower taxes doesn’t seem to buy happiness. Perhaps it’s more about what states do, or don’t do, with the revenue that leads to an overall good quality of life. Rather than simply cutting taxes, states wanting to improve their happiness index might think more about how such dollars should be spent, and what helps the population enjoy the most out of life.
John A. Tures is Professor of Political Science and Coordinator of the Political Science Program at LaGrange College, in LaGrange, Georgia. His first book, “Branded”, is available on Amazon. He can be reached at jtures@lagrange.edu.