“Death, taxes and childbirth! There’s never any convenient time for any of them,” lamented Gone with the Wind author Margaret Mitchell. Uncle Sam’s arm is extended, palm up, and he’s looking directly at you. The average American household pays more than $5,700 in federal income taxes each year. In fact, the nation doesn’t earn enough money to pay its total tax bill for the year until April.
While federal taxes are the same for everyone nationwide based on income brackets, state income tax rates vary from state to state. Six states don’t even charge any income tax at all. Of the 44 states that do (and Washington, D.C.), the rate varies widely. In fact, the state with the highest marginal income tax rate has a rate more than five times greater than the state with the lowest rate. The Tax Foundation published a report comparing state individual income tax rates and brackets for 2017. These are the states where you’ll pay the most.
- Highest marginal income tax bracket rate: 6.9%
Arkansas ranks as the No. 15 highest state for income taxes. If you make more than $35,000 per year, you’ll pay 6.9% in state income taxes. Unlike federal income taxes, Arkansas’ income tax system does not provide expanded income tax brackets to couples filing jointly. The average Arkansas family pays $2,343 in state income taxes each year. Arkansas is bordered by states with lower state income tax rates – including Texas, which does not collect state income taxes.
Next: This high-income taxing state is also the only state to impose a gift tax.