Tax burdens have been steadily climbing across the United States, reaching heights not seen in decades.
Pandemic-era economic shifts caused taxable income, activities, and property values to skyrocket faster than the net national product, leading to a huge increase in tax burdens. In fact, the tax burdens in 2020, 2021, and 2022 are the highest they’ve been since 1978.1
Learn which of these states’ residents are shouldering the heaviest tax loads.
1. California
- High Income Tax: California boasts the highest state income tax rate in the nation,(ref) reaching a staggering 13.3% for individuals earning over $1 million.
- “Millionaire’s Tax”: An additional 1% mental health services surcharge is imposed on income exceeding $1 million, further increasing the tax burden for top earners.(ref)
- High Sales Tax: California also has one of the highest statewide tax rates of 7.25% with district tax rates averaging around 0.10% to 1.50%.(ref)
- Property Tax: While California’s property tax rates are relatively low, its high property values result in substantial property tax bills for many homeowners.
2. New York
- High Income Tax: New York has a progressive income tax system for residents and state taxes, starting with taxable income of $65,000 and up.(ref)
- High Property Taxes: New York is notorious for its high property taxes, especially in areas like New York City and Long Island.(ref)
- Additional Taxes: New York City imposes its own income tax, further increasing the overall tax burden for residents of the city.(ref)
3. New Jersey
- High Income Tax: New Jersey has a progressive income tax structure with a top rate of 10.75% on income over $5 million.(ref)
- High Property Taxes: New Jersey consistently ranks among the states with the highest property taxes, putting a strain on homeowners.(ref)
- Inheritance and Estate Taxes: New Jersey is one of the few states that still levy both an inheritance tax and an estate tax that affects the transfer of wealth to beneficiaries.(ref)
4. Illinois
- Flat Income Tax: Illinois has a flat income tax rate of 4.95%, which applies to all income levels.(ref) While this might seem moderate, it can still result in a significant tax burden, especially for high-income earners.
- High Property Taxes: Illinois has some of the highest property taxes in the nation, affecting homeowners across the state.(ref)
5. Connecticut
- Progressive Income Tax: Connecticut has a progressive income tax system with rates ranging from 3% to 6.99%. High-income earners face a huge tax burden.(ref)
- High Property Taxes: Connecticut’s property taxes are among the highest in the country, impacting homeowners’ finances.(ref)
- Estate Tax: Connecticut imposes an estate tax, which can affect the transfer of wealth to beneficiaries.(ref)
6. Massachusetts
- Flat Income Tax: Massachusetts has a flat income tax rate of 5%, applicable to all income levels.(ref) While this might seem straightforward, it can result in a tax burden, especially for high-income earners.
- High Property Taxes: Property taxes in Massachusetts are among the highest in the nation, putting a strain on homeowners.(ref)
- Sales Tax: While the state sales tax rate is 6.25%, local taxes can increase the overall sales tax burden in some areas.(ref)
- Estate Tax: Massachusetts imposes an estate tax, potentially affecting the transfer of wealth to beneficiaries.(ref)
7. Maryland
- Progressive Income Tax: Maryland has a progressive income tax structure with rates ranging from 2% to 5.75%.(ref)
- Local Income Taxes: In addition to the state income tax, many counties in Maryland impose their own local income taxes, further increasing the overall tax burden for residents.
- Property Taxes: Property taxes in Maryland, while not the highest in the nation, can still be huge, especially in areas with high property values.(ref)
8. Minnesota
- Progressive Income Tax: Minnesota has one of the highest top marginal income tax rates in the country, reaching 9.85% for individuals earning over $174,100 and couples earning over $271,050.(ref)
- Property Taxes: Property taxes in Minnesota are relatively high, impacting homeowners across the state.(ref)
- Sales Tax: While the state sales tax rate is 6.875%,(ref) local taxes can further increase the overall sales tax burden in certain areas.
9. Rhode Island
- Progressive Income Tax: Rhode Island has a progressive income tax structure with rates ranging from 3.75% to 5.99%.(ref)
- Property Taxes: Rhode Island’s property taxes are among the highest in the nation, putting a strain on homeowners.(ref)
- Sales Tax: The state sales tax rate is 7%,(ref) which can impact consumer spending and the cost of living.
10. Vermont
- Progressive Income Tax: Vermont has a progressive income tax system with rates ranging from 3.35% to 8.75%.(ref)
- Property Taxes: Property taxes in Vermont are relatively high, impacting homeowners across the state.(ref)
- Estate Tax: Vermont imposes an estate tax that can possibly impact the transfer of wealth to beneficiaries.(ref)
11. Oregon
- Progressive Income Tax: Oregon has one of the highest top marginal income tax rates in the country, reaching 9.9% for individuals earning over $125,000 and couples earning over $250,000.(ref)
- Property Taxes: Property taxes in Oregon are relatively moderate compared to some other states on this list, but they can still contribute to the overall tax burden.(ref)
12. Hawaii
- Progressive Income Tax: Hawaii has a progressive income tax structure with rates ranging from 1.4% to 11%. The top rate applies to individuals earning over $200,000 and couples earning over $400,000.(ref)
- High Excise Taxes: Hawaii has high excise taxes on gasoline, cigarettes, and alcohol, which can impact the cost of living for residents.(ref)
- “GET” (General Excise Tax): Hawaii has a unique 4% tax on most business transactions, which can indirectly affect consumers through higher prices.(ref)
13. Iowa
- Progressive Income Tax: Iowa has a progressive income tax structure with rates ranging from 4.40% to 5.70% for the current year. The top rate applies to income over $75,001 for individuals.(ref)
- Property Taxes: Property taxes in Iowa can be significant, especially in areas with high property values.(ref)
- Inheritance Tax: Iowa imposes an inheritance tax, with rates from 2% to 4%.(ref)
14. Wisconsin
- Progressive Income Tax: Wisconsin has a progressive income tax structure with rates ranging from 3.50% to 7.65%.(ref)
- Property Taxes: Property taxes in Wisconsin are relatively high, impacting homeowners across the state.(ref)
- Sales Tax: The state sales tax rate is 5%, but local taxes can increase the overall sales tax burden in some areas.(ref)
15. Maine
- Progressive Income Tax: Maine has a progressive income tax structure with rates ranging from 5.8% to 7.15%.(ref)
- Sales Tax: The state sales tax rate is 5.5%, which can impact consumer spending and the cost of living.(ref)
- Property Taxes: Property taxes in Maine, while not the highest in the nation, can still be substantial, especially in areas with high property values.
While taxes are necessary to fund essential public services and infrastructure, these high taxes can impact many individuals and businesses.
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Davin is a jack-of-all-trades but has professional training and experience in various home and garden subjects. He leans on other experts when needed and edits and fact-checks all articles.