Americans have to deal with a number of taxes, some on a nearly daily basis like sales tax and others that are paid periodically during the year such as property and income taxes. All Americans are subject to the same level of taxation based on income at the federal level, but the state level income tax burden varies from zero to over 13%.
Sales and property taxes also vary across the country not just by the amount levied but also on what is taxed. For example some states have no sales tax and others exempt shoppers from paying sales tax on specific items like clothing. Likewise nearly half of the states don’t collect taxes on personal property, however, all tax real property including houses, buildings and land.
These are the 10 states where taxpayers pay the highest percentage of their income
All those different taxes add up and in turn affects how much a taxpayers’ overall tax burden is. Generally, residents of states that have higher income taxes shell out more of their earnings to the government in one form or another. The following states are the ones with the highest income taxes as of 1 January 2024 according to the Tax Foundation.
| Rank | State | Top marginal rate |
|---|---|---|
| 1 | California | 13.3% |
| 2 | Hawaii | 11% |
| 3 | New York | 10.9% |
| 4 | New Jersey | 10.75% |
| 5 | District of Columbia | 10.75% |
| 6 | Oregon | 9.9% |
| 7 | Minnesota | 9.85% |
| 8 | Massachusetts | 9% |
| 9 | Vermont | 8.75% |
| 10 | Wisconsin | 7.65% |
While the above states have the highest marginal individual income tax rates only five of them fall into the top ten with the highest overall tax burden. Those include California, Hawaii, New Jersey, New York and Vermont. The following are the ten states where residents pay the highest percentage of their income in taxes according to World Population Review based on data collected by WalletHub.
| Rank | State | Percentage of overall tax burden |
|---|---|---|
| 1 | New York | 15.9% |
| 2 | Connecticut | 15.4% |
| 3 | Hawaii | 14.1% |
| 4 | Vermont | 13.6% |
| 5 | California | 13.5% |
| 6 | New Jersey | 13.2% |
| 7 | Illinois | 12.9% |
| 8 | Virginia | 12.5% |
| 9 | Delaware | 12.4% |
| 10 | Maine | 12.4% |
“Each tax burden listed here takes into account property taxes, income taxes, and sales and excise taxes,” explains World Population Review.
According to the Tax Foundation New Jersey (2.23%), Illinois (2.08%), New Hampshire (1.93%), Vermont (1.83%), Connecticut (1.79%), Texas (1.68%), Nebraska (1.63%), Wisconsin (1.61%), Ohio (1.59%) and Iowa (1.52%) have the highest effective property tax rates. The percentages represent the amount of property taxes paid based on 2021 owner-occupied housing values.
There are five states that do not collect sales taxes statewide including Alaska, Delaware, Montana, New Hampshire, and Oregon. However, of these only Alaska permits localities to impose local sales taxes.
Based on research by the Tax Foundation as of 1 July 2023 the highest average combined state and local sales tax rates are in Tennessee (9.548%), Louisiana (9.547%), Arkansas (9.443%), Washington (9.397%), Alabama (9.237%), Oklahoma (8.986%), California (8.851%), Illinois (8.838%), Kansas (8.750%) and New York (8.532%).
