Everybody hates high taxes!
It’s a fact that nobody likes paying taxes, especially if they have a lot to pay. For many people in our country, April 15th, or tax day, as it is usually called, is one of the most dreaded days of the year.
Each state in the United States sets its own income tax, property tax, and sales tax rates in addition to the federal government. As a result, the tax burden differs greatly amongst states. As of 2022, the three states with the highest tax burdens in the United States are California, Hawaii, and New York. Are you among those unlucky ones? Tell us in the comments!
Read on because we ranked some of the states that have the highest taxes, from most aggressively taxed to least.
1. California- the first state with the highest taxes
Your ability to pay your state and federal income taxes may be impacted by your personal income. Depending on your state of residence, method of income generation, and property ownership status, some of you reading this post may be experiencing a little bit more disappointment.
The total tax burden can differ significantly from state to state. Don’t envy those who are living in the states with no income tax because nobody gets out of living a tax-free life so easily! Researchers examined the 50 states’ property taxes, individual income taxes, and sales and excise taxes as a percentage of each state’s total personal income. They discovered a greater than seven percentage-point difference between the highest and lowest state tax rates.
Californians, unfortunately, have the highest taxes of any other state in America. Even if the property tax is pretty low compared to other states, California has the highest total state tax burden of any state due to the high housing prices there, with a median price of $475,900.00.
2. New York
It should not be shocking to list New York among the states with the highest taxes. Property values are high, which results in hefty property taxes. In New York, where earnings are high, and taxes are high, a large portion of the income is required to pay state income taxes. If you’re living in the metro area of the city, you will also see an additional 0.35% sales tax in order to support public transportation and transit.
Last but not least, the Empire State also receives income from its sales taxes. Are you from New York? How do you deal with the tax season?
3. New Jersey
One of the fastest population reductions in the country is currently occurring in New Jersey. While there are many reasons why people relocate, New Jersey’s high taxes are particularly burdensome for a lot of its citizens. The New Jersey’s median home price is $327,900, one of the highest in the country. The high home prices are combined with the highest state property tax rate in the country, which is around 2%.
So, where does that leave New Jersey when it comes to the highest taxes? Slightly behind New York, Maine, and Minnesota.
“Oh, think twice, ’cause it’s another day for you and me in paradise.” Hawaii may be a paradise for some people, especially for tourists, but when it comes to taxes, you should know that it doesn’t stray too far from New York or California. It was actually decided that all individuals earning more than $200,000 per year would impose a 16% tax on their income. A lot of people believe that because it suffered a huge decline in tax revenue from tourism because of the pandemic, the government is looking for new sources of profit.
If you’re Hawaiian, you already know that the cost of living in this state is the highest in the nation. It has been established that Hawaii’s state budget per capita is around $12,896. That’s why a lot of people take into consideration the idea of relocating to another state.
What do you think? Do you agree that Hawaii is among the highest-taxed states?
While a lot of us claim that taxes in our states are huge and heavy to bear, a recent study shows that Maines’ tax burdens are among the heaviest. Maine was ranked fifth in the United States for having the highest taxes. The typical statewide property tax rate in the Pine Tree State is also higher than normal but not excessive. Additionally, Maine has an estate tax, which means more bad news, I’m afraid.
However, the state levies a comparatively low sales tax in an effort to make up for some of its other taxes. Only the state sales tax of 5.5% is required in Maine, one of the few states that forbid cities and towns from enacting their own municipal sales taxes. What wonderful news!
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Unfortunately, Vermonters pay a huge amount of money in taxes as well. Almost 10.3% of their income goes directly to the state’s “pockets” every year, putting it in the 6th position among the states with the highest taxes in the country. After every “tax season,” the state collects an average of $4,950 per taxpayer, about $2,000 more than is normal across all American states.
If you are considering relocating to Vermont, you should think twice because even though it is just across the Connecticut River from New Hampshire, Vermont is a totally different place. Additionally, Vermont has the fifth-highest statewide median property tax rate in the nation.
Are you from Vermont? How do you manage to survive after every tax season? Tell us in the comments.
7. Rhode Island
Several New England states, including Rhode Island, are among those with the highest effective tax burdens. The state’s 7.0% sales tax, which is the second-highest sales tax rate among states, contributes to the high tax burden. In Rhode Island, there are also expensive property taxes.
Property taxes in Rhode Island are higher than in all but six other states, totaling the equivalent of $2,339 per person per year. Property taxes bring in the most money for the state, accounting for 43.2% of total revenue.
In an effort to promote economic growth, Rhode Island recently lowered corporation taxes. In the past ten years, corporations have received hundreds of millions of dollars in tax benefits, and now Rhode Island’s per capita corporate tax receipts are lower than the national average.
The tax load on Connecticut residents is the second highest in the nation and the highest of any state in New England. Every year, the state government collects $2,279 per person in income tax alone. The total amount of taxes collected by the state, including additional levies, amounts to $4,249 per person annually, which is significantly more than the $2,869 average for all states. Additionally, Connecticut residents pay a sizeable portion of their income in property taxes due to the state’s high, 16 % property tax rate.
Are you a resident of one of these states? If you and your family live in one of these states, your pockets know this by now. But taxes differ from one state to another, and those who live in a state with higher taxes benefit from other tax-related perks like no state income tax.
You might also like: 24 Sales Tax Holidays That Will Help You Save Money.