- A state’s tax burden is based on its individual income, property, and sales/excise taxes.
- As a result, your tax burden can vary greatly depending on where you live.
- States with the highest tax burdens include New York, California, and Minnesota.
If you’re thinking about moving to a new state, then you might want to look at its taxes. Since individual income, property, and sales/excise taxes vary from state to state, your total tax burden can vary significantly.
So, where do residents pay the most taxes? To figure that out, a recent WalletHub report compares every state across the three categories of state tax burdens as a share of total personal income. Here are the ten states with the highest total tax burdens.
- Total tax burden: 12.75%
New York’s high tax burden may be driving some residents away. According to CNBC, “Several high-tax states have lost residents during the pandemic” — and New York was among the top five states and districts to lose residents.
However, The Buffalo News says the state legislature agreed to Governor Kathy Hochul’s proposal to accelerate planned income tax cuts for middle-class taxpayers. So, there should be some relief for millions of residents soon.
- Total tax burden: 12.70%
Even though Hawaii already has a high tax burden, The Tax Foundation says it’s “the rare state mostly exploring tax increases.” However, it’s worth noting that proposed increases aren’t targeted at low-and middle-income taxpayers.
Paradise might come at a steeper cost for high earners. According to the source, Hawaii is considering a new corporate income tax rate of 9.6% and a new top individual income tax rate for those making above $500,000.
- Total tax burden: 11.42%
The Pine Tree State also has one of the highest tax burdens in the country. But there is some good news: Maine is issuing inflation relief tax rebates of $850 to eligible individuals and $1,700 to eligible joint filers.
According to Maine.gov, individuals need a federal adjusted gross income of less than $100,000 and couples need one of less than $200,000. The source estimates that “858,000 Maine people will receive these payments.”
- Total tax burden: 11.13%
Maine isn’t the only New England state to make the list. In fact, you’ll find several states in the region have high tax burdens. Vermont, for example, has notably high taxes. That’s partly because of its unique property taxes.
According to SmartAsset, “Vermont is one of the few states in which the state itself levies a property tax in addition to those the local government does.” It’s good to keep in mind that property taxes help fund schools, though.
- Total tax burden: 10.20%
Let’s head to the midwest for this next one. Minnesota is another state with a high tax burden — and taxes have been a hotly contested subject recently. According to The Minnesota Reformer, tax rebate checks are on the table.
Since the state has a $7 billion budget surplus, Democrats want to issue $1,000 rebates to individuals making less than $165,000 and $2,000 to couples making less than $275,000. Republicans want to explore tax cuts instead.
- Total tax burden: 10.11%
If New York’s high tax burden has you eyeing New Jersey, then you may want to reconsider. The Garden State also has high taxes. According to NJ.com, residents will pay an average of $931,698 in taxes over their lifetimes.
The source says New Jersey has the highest property taxes in the country. As a result, it says the average property tax bill is more than $9,000. But Patch says new property-tax rebates will benefit both homeowners and renters.
- Total tax burden: 10.06%
As previously mentioned, New England is a region with high taxes. Connecticut, for instance, has the nation’s seventh highest overall tax burden, according to WalletHub. The state has implemented some tax holidays, though.
WFSB says Connecticut held a sales tax holiday on clothing and shoes in April, and CT Insider says the state has extended its gas tax holiday until December. So, steps have been taken to offer relief during this period of inflation.
- Total tax burden: 9.91%
Except for Massachusetts and New Hampshire, every other state in New England falls within the top 10 states with the highest overall tax burden. That means Rhode Island also makes the list. However, some tax relief is coming.
While a gas tax holiday was rejected, WJAR says the state is eliminating the motor vehicle excise tax. Plus, The Newport Daily News says a child tax rebate of “$250 per child for a maximum of three children” is on the way.
- Total tax burden: 9.72%
Much like New York, CNBC says California is another high-tax state losing residents. Perhaps upcoming inflation relief tax rebates will help. VERIFY says the state is sending rebates of up to $1,050 to eligible residents this fall.
According to the source, “The amount of money that a person will receive depends on their income and the number of dependents they claimed on their income tax return.” It’s estimated that about 500,000 tax filers aren’t eligible.
- Total tax burden: 9.70%
Finally, Illinois rounds out the top 10 states with the highest overall tax burden. However, Illinois.gov outlines tax relief measures that are on the way. For example, the state has suspended the tax on groceries for one year.
Additionally, the source says the state also built other measures into its upcoming budget, like a property tax rebate of up to $300 per household and an income tax rebate of $50 per individual and $100 per dependent (up to three children) for eligible taxpayers.