10 Tax-Laden States Where Americans Fork Over the Greatest Percentage of Money
Tax season is officially over. But that doesn’t mean some Americans aren’t left struggling in its wake.
WalletHub conducted a study in the first quarter of 2023 to determine the portion of total personal income that residents have to put toward state and local taxes. Ranking states based on tax burden is more accurate than tax rates, given the variability of tax rates according to personal circumstances.
These are the top states with the worst tax burden.
1: New York
New York is the worst state in the U.S. for tax burden. The Empire State makes big bucks from its residents, boasting the largest individual income tax burden (4.72%). It also has the fifth-worst property tax burden in the nation, at 4.36%.
2: Hawaii
Hawaii may seem like a dream destination to tourists, but its residents likely don’t feel the same on the tax front. The Aloha State has the worst sales & excise tax burden in the nation, at 6.71%.
3: Maine
Maine’s total tax burden is 11.14%, which isn’t a huge improvement from New York’s 12.47%. The Pine Tree State is tough on homeowners, having the worst property tax burden in America (5.33%).
4: Vermont
Despite ranking in 27th place for both individual income tax and total sales & excise tax burden, Vermont has the second-worst property tax burden in the nation (4.98%), pulling it up to the fourth-worst state for tax burden.
5: Connecticut
Connecticut is the first state to drop into single digits for total tax burden (9.83%). However, the Nutmeg State ranks sixth and ninth in the nation for the worst property tax and individual income tax burdens, respectively.
6: New Jersey
New Jersey residents enjoy a low total sales & excise tax burden, as the Garden State ranks the 43rd lowest in the U.S. But its fourth-worst place for property tax burden makes New Jersey a place residents-to-be might want to stay away from.
7: Maryland
Maryland is the second-worst state in America for individual income tax burden, at 4.21%. Its lower-than-average property tax and total sales & excise tax burdens mercifully prevent it from ranking higher on this list.
8: Minnesota
Minnesota’s individual income tax burden is rough, at a 3.11% rate, which ranks it the 6th-worst in the nation. The North Star State ranks slightly higher than average for property tax burden and total sales & excise tax.
9: Illinois
Illinois is the first state on this list that doesn’t rank in the single digits for the different tax burden categories. However, its 10th and two 22nd places for property tax, individual income tax, and total sales & excise tax burdens, respectively, don’t make it a tax-friendly state for residents.
10: Iowa
Iowa takes the unwanted final spot in the top ten worst states for tax burden. The Hawkeye State is the 14th-worst state for property tax burden and the 16th-worst state for individual income tax burden.
Lowest Tax Burden State
Alaska is the best state for people wanting to save on taxes, ranking a low 5.06% for total tax burden. The Last Frontier has a 0% individual income tax burden, 1.47% total sales & excise tax burden, and 3.59% property tax burden.
A Grave Statistic
When looking at property tax as a percent of personal income, there’s a four-times difference between Maine, which has the highest property tax rate, and Alabama, which has the lowest property tax rate.
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