Benjamin Franklin once wrote, “In this world nothing can be said to be certain, except death and taxes.” If you’re like most Americans, paying Uncle Sam is your largest financial burden. In fact, the nation as a whole doesn’t earn enough money to pay its total tax bill for the year until mid-April. Making matters worse for some individuals, taxes can vary significantly between states.
WalletHub recently analyzed how state and local tax rates compare to the national median in all 50 states as well as the District of Columbia. The purpose was to determine which states pay the highest and lowest tax rates, and to see how each state stacks up against the national median. This comparison was based on nine different types of taxation: real estate taxes, state and local income taxes, vehicle property taxes, vehicle sales taxes, sales and use taxes, fuel taxes, alcohol taxes, food taxes, and telecom taxes.
Taxpayers in the states with the highest taxes pay four times more than those in the states with the lowest taxes. We previously took a look at the cities with the highest taxes – now, let’s take a look at the 10 states with the highest state and local taxes, according to WalletHub.
- Average Annual State and Local Taxes: $8,622
- Difference from National Average: 24 percent
- Adjusted Rank by Cost of Living: 43
New England is not particularly kind to taxpayers. Maine ranks as the 10th worst state when it comes to tax bills. However, a move from Maine to New Hampshire or Massachusetts may lower your tax burden. In comparison, New Hampshire has an average annual state and local tax bill of $7,419, while Massachusetts has an average bill of $6,884. In a separate analysis conducted by WalletHub, Main also ranks No. 27 in regard to finding tax help from accountants.