Southern states generally tax their citizens less than their northern counterparts, and Florida, Tennessee, and Texas lack a personal inco...
Southern states generally tax their citizens less than their northern counterparts, and Florida, Tennessee, and Texas lack a personal income tax. Northern states are known for their higher taxes, and these 18 states can eat up Americans’ salaries.
New York
New York has one of the highest state income tax rates in the U.S. Forbes notes that the average tax rate in the Empire State is 10.94%, and the marginal tax rate is 22%. Depending on residents’ tax brackets, there is an additional local income tax of between 3.078% and 3.876% on top of state income taxes.
Pennsylvania
Pennsylvania has a unique system where the state income tax is relatively low, at 3.07%, but local income taxes can significantly increase this. It also has a high sales tax rate of 6.00% and an inheritance tax that varies depending on the relationship to the decedent and can go up to 15%.
Maryland
Maryland has county-level income taxes and a state income tax rate of 5.00%. The Old Line State is one of the few with an estate and inheritance tax, and there are higher-than-average property taxes.
Minnesota
The Land of 10,000 Lakes is known for its progressive income tax system with rates that can exceed 9% and a sales tax that includes a statewide rate of 6.875%, plus local taxes that drive the figure up. In addition to these taxes, individuals in the state have to pay high property taxes.
Oregon
Oregan has no sales tax, but residents must pay one of the highest income tax rates in America, with rates in the graduated tax ranging from 4.75% to 9.90%. However, the Beaver State also features a unique tax kicker rebate system that sees the state government return money to taxpayers when their revenue exceeds their projections.
Connecticut
The Constitution State has one of the nation’s highest per capita income tax collections. The Tax Foundation notes that the top individual income tax rate in the state is 6.99%. Property taxes significantly contribute to local government revenue; the state has the fifth-highest property taxes in the nation.
California
CDTFA explains that California’s statewide tax rate is 7.25%, which is pushed over 10% in local rates in some areas. The Golden State has high marginal income tax rates for high earners and significant property taxes despite the limitations of 1978 Proposition 13.
Wisconsin
America’s Dairyland has a progressive income tax system with rates that can climb over 7% for those earning higher salaries. It also has relatively high property taxes of 1.51%, the eighth highest in the country. While its sales tax isn’t as high, it can increase with local surtaxes.
Ohio
Ohio’s graduate income tax system has rates that top 4.8% for some, and its sales and use taxes vary depending on where citizens live in the state. Its high property taxes fund local schools, which is great for parents but can be inconvenient to those without children.
Illinois
This Midwestern state has a flat income tax rate of 4.95% but high property tax rates of 1.97%, the second highest in the nation after New Jersey. Avalara writes that “combined sales tax rates in Illinois range from 6.25 percent to 11 percent, depending on the location of the sale.”
Iowa
According to the Tax Foundation, “Iowa has a graduated individual income tax, with rates ranging from 4.40 percent to 6.00 percent.” The Hawkeye State has some jurisdictions that collect local income taxes, but its estate tax has been phased out, offering some relief to citizens.
New Jersey
New Jersey’s property tax rates are among the highest in the nation. SmartAsset notes that the average effective property rate in the Garden State is 2.26%, much higher than the national average of 0.99%. New Jersey also has a progressive income tax system, inheritance tax, and federal estate tax.
Rhode Island
The Ocean State has a progressive income tax system with rates that see those earning the highest amounts taxed at 5.99%. Its property taxes rank among the highest in the nation, and its 7% sales tax rate might be consistent, but it applies to many services.
Vermont
The Green Mountain State’s progressive income tax rates reach 8.75% for those earning higher salaries. Vermonters also have to contend with property taxes that are among the highest in the nation, and those who are non-residents pay even higher figures.
Nebraska
Nebraska’s progressive income tax rates can exceed 6.5%. While its sales and use taxes are in line with national averages, they include many local variations that can see residents lose more of their salary. Homeowners are also significantly taxed in Nebraska.
Kansas
AP News recently reported that a Republican plan to introduce a “flat” income tax rate to Kansas failed “when enough members concluded that it would favor wealthy taxpayers too much.” The state income tax rates can reach 5.70% for those earning the most, and the sales tax includes both state and local rates, going above 9% in some areas.
Michigan
The Great Lakes State has a flat income tax rate of 4.25%, but it has significant property taxes and a sales tax that is applied to many transactions. Vehicle registration fees and gas taxes can also eat up people’s salaries.
Indiana
Indiana’s flat income tax rate of 3.15% is relatively low and offers residents some predictability, but its sales tax applies to many different transactions. State law caps property taxes, which provides some relief but is still a notable expense.
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