This State Has the Highest Tax Burden in the United States
In America, there’s more to taxes than April 15. For independent contractors, taxes are due every quarter. Meanwhile, sales tax is an unpleasant fact of everyday life in each state. No matter what you might have heard about the GOP tax plan, that type of tax is here to stay.
You won’t be filing your 1040 form on a postcard this year, and most folks won’t have lower tax payments in 2018, either. In other words, it’s mostly status quo when the tax man comes calling.
Still, residents of some states will feel the pinch more than others. An April 2018 report by WalletHub broke down where people pay the most to Uncle Sam, based on the amount as a percentage of income. Here are the 15 states with the highest tax burden in America.
- Higher-than-average rates for income, property, and sales tax put Iowa on the list.
While no single tax will get you in Iowa, the state does rank among the top 20 in both property and income taxes. Overall, it amounts to 9.32% of an Iowan’s income.
In April 2018, the state legislature debated lowering income taxes and raising the sales tax, which could end up doing little to move the needle.
Next: Sales tax will get you in this Southern state.
- The Mississippi sales tax squeezes residents at an unusually high rate.
Though the total tax burden of Mississippi (9.32%) tied Iowa’s, the edge goes to The Magnolia State for its burdensome sales tax. Even with relatively low property and income taxes, Mississippi’s overall burden put it on a list where you find fewer red states.
Even with sales taxes so high, residents nearly saw another $1.50 tacked onto packs of cigarettes from a bill proposed in 2018.
Next: This state is among the most dependent on the federal government.
13. West Virginia
- In West Virginia, residents pay a lot and get a lot back from the federal government.
With its low population and poor GDP per capita, West Virginia needs all the tax money it can get. That explains why the state is among the most dependent on the federal government.
The high sales and income taxes contributed to 9.4% of a resident’s total income going to Uncle Sam.
Next: In Maryland, a high income tax does most of the heavy lifting.
- Only 2 states tax personal income more than Maryland.
You don’t need to look far to see how Maryland ended up here. The state’s income tax burden comes to nearly 4% of personal income, WalletHub’s study showed.
That left only two states that tax residents’ paychecks more. In total, Maryland claims 9.45% of total income.
Next: This state has the highest tax burden of any that voted for Trump in 2016.
- No red state taxes residents like Ohio.
Of the states that voted for Trump in 2016, none has higher taxes than Ohio. Income and sales/excise taxes (both of which are in America’s top 15) jump out the most.
Meanwhile, the state is among the biggest spenders on Medicaid. Overall, Buckeye State residents fork out 9.48% of personal income to the tax man.
Next: At No. 10, California’s place might surprise people.
- You’ve got to pay your share in the nation’s most populous state.
With the fifth-highest income tax in America, many would expect California to rank among the top two or three states for high taxes. However, relatively low property (29th) and sales (30th) taxes ease some of the overall burden.
At 9.57% of a Californian’s personal income, residents need every break they can get. And hey, somebody’s gotta pay to keep all the freeways paved in the nation’s largest economy.
Next: The first of 9 states that claim more than 10% of residents’ personal income for taxes
9. New Jersey
- Welcome to property-tax hell.
Anyone who knows the story of Atlantic City knows it’s fair to describe it as a property-tax hell. Between 2010 and 2016, the rate increased 96% there.
Elsewhere in The Garden State, things aren’t much better, with New Jersey behind only Vermont and New Hampshire in the property-tax department. Altogether, Jersey residents fork over 10.02% of personal income to the tax man. Thanks, Chris Christie.
Next: High property taxes sting Illinois residents, too.
- Even ranking 22nd in income tax couldn’t save Illinois.
With a rank of No. 9 in property taxes, Illinois’s reasonable income tax couldn’t drag the state out this spot on the list. Overall, residents pay 10.08% of their total income to Uncle Sam.
Maybe there’s hope for change in the near future? An April 2018 headline from Bloomberg seems pessimistic: “Sorry, Illinois, Your Taxes Aren’t Going Down Anytime Soon.”
Next: Ocean State property taxes cut deep.
7. Rhode Island
- Low income and sales tax policies can help property owners.
Rhode Island may take it easier on income tax than its New England neighbors, but The Ocean State hits residents hard on property taxes. (Rhode Island ranked fifth in this department.)
In total, you’ll pay 10.14% of your personal income to live here.
Next: At No. 7 in both property and income tax, Connecticut residents feel a heavy burden.
- If property taxes don’t get you here, the payroll tax will.
Don’t let the low sales tax in Connecticut fool you. State property taxes and income taxes both landed at seventh for the highest burdens in America.
Altogether, you’ll pay 10.19% of your total income as a Connecticut resident.
Next: This state ranks fourth in income tax.
- At No. 4 for income tax, Minnesota residents feel the tax man’s squeeze every few weeks.
It’s hard to pay more in income taxes than Minnesota residents do: 3.7% of total pay. That weighs heavily on people in the North Star State, which made the top five for highest tax burden in America at 10.37% overall.
With residents worried about taxes going up further from the GOP’s changes to the code, expect a spirited battle in the legislature ahead of the 2018 midterm elections.
Next: In Vermont, residents pay nearly four times the property taxes of Alabama residents.
- With property taxes above 5% of Vermont resident’s income, Uncle Sam plays hardball here.
At No. 2 for highest property taxes (5.2% of income) in America, Vermont residents feel the pinch of home ownership. That figure is nearly four times what Alabama residents pay (1.41%).
A bill to lower property taxes floated in the state House of Representatives in March 2018, but its prospects of passing looked low with Governor Phil Scott threatening a veto.
Next: Only three states have taxes that rise above 11% of income.
- Property taxes hurt the most here, but it’s an “all of the above situation.”
While Maine’s sky-high property taxes sting the most, the income tax (15th) and sales tax (25th) aren’t exactly light. Overall, you’re facing a burden equal to 11.02% of your income in The Pine Tree State.
No wonder Paul LePage, America’s worst-paid governor, wants to double his salary. We worry about the poor guy’s actual take-home pay. Now if he only had the power to change things…
Next: It’s a beautiful life in Hawaii, and everyone has to pay a share.
- Uncle Sam wants his share if you live the island life.
To many Americans, living on the Hawaiian islands is like some outrageously great dream. Maybe it is, but you’ll have to pay to keep services humming.
Overall, Hawaii’s 11.57% tax burden had almost no equals. You’d have to get in a New York state of mind to pay more.
Next: If you can pay taxes here, you can pay them anywhere. It’s up to you…
1. New York
- Income taxes will crush you in The Empire State, and property tax comes close.
If America’s worst state for income taxes doesn’t sting you, New York’s high property taxes will. The Empire State has no equal when it comes to residents’ tax burden a share of income: 13.04%.
That’s more than double the burden of residents in Alaska, Delaware, and Florida. When Sinatra sang about “making it here,” covering the taxes was part of the package.
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