In what states do the residents pay the most taxes? the least? Perhaps it depends on the variable used to measure amount of taxes paid. In 2004 the Tax Policy Center reported the following statistics about the average annual 2002 taxes and percent of personal income paid per person by state.

Taxes per % Personal Capita Rank Income Rank Hawaii $2748 1 9.6 1 South Dakota $1283 50 4.8 47 New Hampshire $1478 45 4.4 50 Sources: Federation of Tax Administrators (2004) and U.S. Bureau of the Census and Bureau of Economic Analysis, http://taxpolicycenter.org/TaxFacts/TFDB/

TFTemplate.cfm?Docid=309&Topic2id=90

a. Compare and contrast the variables “taxes per capita” and “percent of personal income.” How do you account for the differences in ranks for South Dakota and New Hampshire?

b. Based on this information, using the highest and lowest per state amount of taxes paid per person, what was the “average” amount paid per person?

c. Based on this information, using the highest and lowest percent of income per state paid per person, what was the “average” percent paid per person?

d. Explain why your answers to parts b and c are the only average value you can determine from the given information. What is the name of this average?