Where you live in the United States can affect how much money you have to pay as taxes. In this discussion, we will explore the highest income tax states and understand how much money, on average, these states take from people’s paychecks. If you live and work in the U.S., you have to pay federal income tax, but in some states, you also have to pay an additional tax called state income tax.
Top 10 Highest Income Tax States
Below is a detailed ranking of highest taxed states 2023. This table provides insight into the tax rates and state rankings, shedding light on where residents face the heaviest income tax burdens
|
Rank |
State | 2023 Rank | Tax Rate |
|
1 |
New York | 50 | 15.90% |
|
2 |
Connecticut | 49 |
15.40% |
|
3 |
Hawaii | 48 | 14.10% |
|
4 |
Vermont | 47 |
13.60% |
|
5 |
California | 46 |
13.50% |
| 6 | New Jersey | 45 |
13.20% |
|
7 |
Illinois | 44 |
12.90% |
|
8 |
Virginia | 43 |
12.50% |
|
9 |
Delaware | 42 |
12.40% |
| 10 |
Maine |
41 |
12.40% |
| Source: Wisevoter | |||
Which state has the highest sales tax in 2023?
California boasts the highest state sales tax rate in the nation, coming in at 7.25% (collected by Tax Foundation). This rate is applicable to a wide range of goods and services, making it a significant source of state revenue.
Top 5 States with the highest combined sales tax in 2023
|
Rank |
State |
Combined Sales Tax Rate |
|
1 |
Tennessee |
9.548% |
|
2 |
Louisiana |
9.547% |
|
3 |
Arkansas |
9.44% |
|
4 |
Washington |
9.40% |
|
5 |
Alabama |
9.24% |
| Source: Tax Foundation | ||
Both Louisiana and Tennessee share the top spot with the highest combined sales tax rate of 9.55%, followed closely by Arkansas, Washington, and Alabama in the respective ranks indicated. Please note that combined sales tax rates can vary within states due to local sales tax additions.
States with Highest Property Tax
New Jersey stands out as the state with the highest property taxes, where residents face a property tax rate of 2.21% of the property’s value. While property tax rates vary across states, New Jersey’s rates are notably high.
The 5 States with the Highest Property Taxes in 2023
Here are the top five states with the highest property tax rates in 2023 (data gathered from PropertyShark):
- New Jersey: Leading with a property tax rate of 2.47%.
- Illinois: Following closely with a rate of 2.23%.
- Connecticut: Occupying the third spot with a rate of 2.15%.
- New Hampshire: Taking fourth place with a rate of 2.09%.
- Vermont: Completing the top 5 with a rate of 1.9%.
Which state has the highest income tax in 2023?
California holds the distinction of having the highest state income tax rates in the U.S., reaching up to 13.3% for the highest income earners. California’s progressive income tax system means that those with higher incomes pay a larger percentage of their earnings in taxes.
Which states do not require an income tax?
Several states in the U.S. do not impose a state income tax on residents’ earnings. Here are the states with no income tax:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Wyoming
Additionally, New Hampshire only taxes interest and dividends, while Washington exclusively taxes capital gains. These states provide significant tax advantages for residents when it comes to income tax obligations.
Conclusion
As we wrap up our journey through America’s highest income tax states, remember that taxes are the engine that keeps our communities running smoothly. They fund our schools, keep our roads safe, and support so much more. So, while it might sting a bit to see those deductions from your paycheck, know that they’re all part of what makes our country work.
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