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 April. Making matters worse for some individuals, taxes can vary significantly between states.
Highest state taxes
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 four different types of taxation: real estate taxes (based on a median home price of $175,700), vehicle property taxes (based on a 2016 Toyota Camry LE), income taxes (based on mean third quintile income of $53,889), and sales and excise taxes.
Taxpayers in the states with the highest taxes pay three 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.
10. New Jersey
- Average Annual State and Local Taxes: $6,675
- Difference from National Average: 15.7%
- Adjusted Rank by Cost of Living: 47
The Northeast is not particularly kind to taxpayers. New Jersey ranks as the No. 10 worst state when it comes to tax bills. The state doesn’t charge a vehicle property tax, but its real estate taxes are worst in class, with the average bill totaling $4,029. However, a cheaper option is nearby. Delaware ranks as the second best state in the country for taxes. In fact, the average annual state and local tax bill in Delaware is less than half of New Jersey’s tax bill.