When tracking the flow of personal incomes, four groupings of expenditures emerge: taxes, fixed expenses, saving, and consumption. This cross-sectional study of 2016 data highlights the differences in these areas across the sixty-six South Dakota counties and between various levels of income to illustrate the income flows among South Dakota residents. Using data primarily from the Internal Revenue Service, several important patterns and statistics arise. In South Dakota, the average statewide income per capita was about $32,127. Individuals in metropolitan counties received the highest average incomes per capita, and individuals in counties with the lowest population densities had the lowest. On average, about 3.84% of the population of each South Dakota county owned a farm, and about 7.74% of individuals in each county owned a business in 2016. Farm ownership is predictably skewed towards rural counties, and entrepreneurship is relatively more prevalent in metropolitan counties. Out of the average statewide income per capita, about $8,000 went toward state and federal taxes, resulting in an average effective tax rate of about 24.9%. Tax burdens tend to be proportional to the incomes received, so South Dakota counties with relatively high populations paid the most in taxes on a per-capita basis. This leaves $24,127 on average for personal expenditures, the allocation of which is crucial for financial security. In the area of savings and investment, people in relatively more urban counties tend to invest with a higher tolerance for risk than those in comparatively less populated counties. On average, individuals in the state invested with a moderately aggressive level of risk, meaning that they invested in stocks slightly more often than they invested in bonds or notes. This information delineates the current status of monetary behavior in the Midwest and can be used to inform policymakers about how recent economic incentives and fiscal policies are affecting the lives of South Dakota residents.
South Dakota State University
Copyright © 2020 Matthew Berg
Berg, Matthew, "Earning, Taxing, Spending, Saving: Tracking South Dakota Incomes" (2020). Schultz-Werth Award Papers. 8.