Taxes are inevitable, but how much you’ll pay depends greatly on where you live. The tax burden is high in certain states, and they put a lot of pressure on their residents. The income, property, and sales taxes are to blame for these burdens.
So what makes some states rank higher than others, and what does that mean for their residents? Here are 19 states where residents pay the highest tax burdens and some reasons behind the high rates.
New York: 12.02% Total Tax Burden
Coming in first, New York has the greatest overall tax burden of any state. Estimated taxes paid by residents represent 12.02 percent of personal income.
That’s driven by steep property taxes and one of the highest state income tax rates in the U.S. The services and infrastructure that are paid for through such taxes extend widely, but they can be extremely burdensome on residents financially.
Hawaii: 11.80% Total Tax Burden
Secondly comes Hawaii because of sales and excise taxes, the highest in the country at 5.34%. The state is beautiful with scenery and a laid-back lifestyle, but residents also pay more for their goods and services, partly because of those taxes that are too expensive.
Vermont: 11.12% Total Tax Burden
The state’s hefty property taxes give it the third-highest tax burden in the nation. Although these taxes cause strain, they also help fund progressive healthcare programs and an impressive education system that many people appreciate.
Maine: 10.74% Total Tax Burden
Maine now tops the country with a property tax burden of 4.86%. The state’s charming small towns and coastal beauty come at a premium paid by residents, but they also benefit from having strong public services.
California: 10.40% Total Tax Burden
One reason California’s tax burden is so out of whack is that it has the highest individual income tax rate in the nation, 4.87%. However, these taxes fund thousands of education, healthcare, and environmental protection programs that California has come to know and love.
Connecticut: 10.08% Total Tax Burden
Income and property taxes force Connecticut to claim a spot in the top 10. With high tax rates, this small but populous state invests highly in healthcare and education, making it a great place to raise families.
Minnesota: 9.95% Total Tax Burden
Minnesota’s progressive tax system allows high-income earners to pay a larger share. The area’s high-quality public education and health care benefits make the tax burden easier to justify for many.
Illinois: 9.67% Total Tax Burden
Property tax rates in Illinois are among the highest in the nation. Money from these taxes goes toward infrastructure improvements and public schools, and as such, they contribute to the state’s image as a high-tax state.
New Jersey: 9.47% Total Tax Burden
New Jersey’s residents are under financial pressure, with some of the highest property taxes in the nation. However, the state’s strong public education system typically compensates for the worry for property owners with children.
Rhode Island: 9.38% Total Tax Burden
Though Rhode Island is often underestimated on its high taxes, its combination of increased property and income taxes secure it among the top 10. It’s a cost, sure, but residents love the blend of the state’s culture and natural beauty.
Utah: 9.35% Total Tax Burden
Utah’s efficient tax system is largely conferred by moderate income and sales taxes. Though its tax ranking, it’s still a desirable state because of low living costs and a strong job market.
Kansas: 9.29% Total Tax Burden
Kansas’s tax burden is composed of a balanced mix of property, sales, and income taxes. The state is higher in taxation level but its cost of living is low overall.
Maryland: 9.26% Total Tax Burden
Residents in Maryland are paying slightly more for income taxes because the average income is high. But lots of economic opportunities result from the state’s proximity to Washington, D.C.
Iowa: 9.21% Total Tax Burden
Iowa depends on revenue generated primarily by property taxes and uses those funds to help agriculture and small communities. Residents often consider the tax burden reasonable, considering the state’s affordable housing market.
Nebraska: 9.16% Total Tax Burden
While Nebraska’s property taxes exceed the national average, the state’s infrastructure is strong, and its agricultural economy is booming.
Ohio: 8.92% Total Tax Burden
Taxpayers in Ohio face mid-range tax rates; however recent increases in property tax rates have been the result of efforts to revitalize cities such as Columbus and Cleveland.
Indiana: 8.85% Total Tax Burden
Indiana’s taxes continue to be competitive when compared to other states with similar industries. Residents offset higher-than-average property taxes with its low sales tax rate.
Arkansas: 8.79% Total Tax Burden
Arkansas has moderate income tax rates, but also much higher sales taxes that disproportionately take a large toll on low-income residents. However, the overall cost of living is still very low.
Mississippi: 8.76% Total Tax Burden
Wrapping up the list is Mississippi which also has slightly lower property taxes than its cohort. But its overall tax burden is upped by higher sales and excise taxes.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information.
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