Is your state tax-friendly? Here are the most and least taxed in the country
Taxpayers in some states are carrying a far heavier burden than others, according to a new report.
The data, from personal finance website WalletHub, shows that while Americans on average pay $11,000 in federal taxes each year, the amount they pay in overall taxes can vary widely based on where they live. Residents of states with the highest taxes forked over double their share of annual income as those in the lowest taxed ones, due to disparities in state and local rates, the report shows.
Researchers calculated residents' tax burden, or the percentage of income consumed by state and local taxes, by adding up three types of tax types: property taxes, individual income taxes, and sales and excise taxes. They computed the three types of taxes for each state using median U.S. household income, home and car values, and household spending data.
To keep more of your paycheck out of Uncle Sam's pockets, head to Alaska, where the overall tax burden is 5.06%, according to the report. Those who are yearning to live in New York will have to pay for the privilege — 12.47% of your income, to be exact.
Here are the U.S. states with the highest and lowest tax burdens as ranked by WalletHub:
States with the highest tax burdens:
- New York (12.47%)
- Hawaii (12.31%)
- Maine (11.14%)
- Vermont (10.28%)
- Connecticut (9.83%)
- New Jersey (9.76%)
- Maryland (9.44%)
- Minnesota (9.41%)
- Illinois (9.38%)
- Iowa (9.15%)
States with the lowest tax burdens:
- Alaska (5.06%)
- Delaware (6.12%)
- New Hampshire (6.14%)
- Tennessee (6.22%)
- Florida (6.33%)
- Wyoming (6.42%)
- South Dakota (6.69%)
- Montana (6.93%)
- Missouri (7.11%)
- Oklahoma (7.12%)