New York’s Tax Burden Is Worst in the Nation, Study Finds
A recent WalletHub study reveals that New York residents shoulder the heaviest tax burden in the United States. This means that a significant portion of their income goes to state and local taxes, more than in any other state.
Here’s what a high tax burden looks like for New Yorkers and where other states stand.
Understanding Tax Burden
Tax burden refers to the percentage of income that residents pay in taxes to their state and local governments. It’s different from tax rates, which are the percentages set by law and vary according to one’s personal circumstances.
Instead, tax burden looks at how much taxes people pay in proportion to what they earn. This gives a clearer picture of how taxes impact everyday life.
New York’s Tax Breakdown
According to WalletHub, the total tax burden in New York is 12.02% of residents’ income. This includes 4.63% for income taxes, 4.36% for property taxes, and 3.03% for sales and excise taxes.
This means that for every dollar a New Yorker earns, 12 cents go to state and local taxes. The second worst state for tax burden is Hawaii, where locals lose 11.8 cents of every dollar earned to state and local taxes.
Why Are New York’s Taxes So High?
There are several reasons why New York’s tax burden is the highest. One major factor is the state’s extensive public services pushed by a progressive agenda. Another is the cost of living in New York, especially in cities like New York City, is high. This contributes to higher property values and, consequently, higher property taxes.
Additionally, New York has a migration problem. More New Yorkers are leaving the Empire State than new residents are moving in. That means state and local governments receive less money in taxpayer dollars, and the remaining New Yorkers are left footing the bill.
Impact on Residents
For many New Yorkers, a high tax burden is unbearably frustrating and a driving force that many are leaving the state, compounding the problem for state and local governments. It means less take-home pay and can make it harder to save money and afford other expenses.
However, it’s also important to consider the benefits that come from these taxes. The revenue collected helps fund public services like education, transportation, and healthcare, which many residents rely on.
States With the Worst Tax Burden
These are the top ten states with the worst tax burden, according to WalletHub’s study.
- New York: 12.02%
- Hawaii: 11.80%
- Vermont: 11.12%
- Maine: 10.74%
- California: 10.40%
- Connecticut: 10.08%
- Minnesota: 9.95%
- Illinois: 9.67%
- New Jersey: 9.47%
- Rhode Island: 9.38%
States With the Least Tax Burden
In contrast, residents of the following states get to keep more money in their pockets after accounting for state and local taxes in proportion to their incomes.
- Alaska: 4.93%
- New Hampshire: 5.63%
- Wyoming: 5.70%
- Florida: 6.05%
- Tennessee: 6.07%
- Delaware: 6.43%
- South Dakota: 6.44%
- North Dakota: 6.80%
- Oklahoma: 7.04%
- Nevada: 7.37%
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