States With the Greatest Tax Pain

By William G. Beamer on February 10, 2016
Categories: TAXES

As tax season approaches, here is a bit of good news from the nonpartisan Tax Foundation:  State and local taxes, as a percentage of Americans’ income, have decreased across the country.

The foundation’s analysis of 2012 tax data concluded that the tax burden declined because Americans’ income increased at a faster rate then tax collections.

You might assume that Americans pay the most taxes to the federal government, but in reality state and local taxes take a bigger bite.

The foundation’s research revealed that 78 percent of taxes collected were from state and local governments. The average state and local tax burden as a percentage of state income is 9.9 percent.

While some states have a reputation for having high rates, most state taxes fall into a narrow range. For instance, the taxation percentage of Delaware, which has the 16th highest tax burden, is only slightly more than one percent higher than Colorado, which is 35th on the list.

Taxes that Americans pay on the state and local level include property taxes, sales taxes, individual income taxes, estate taxes and excise taxes on such things as alcohol, public utilities and cigarettes.

States With the Highest Tax Burden

Most of the states with the highest tax burden are located on the East and West coasts. Here are the 10 states where the tax hit is greatest:

New York 12.7 percent

Connecticut 12.6 percent

New Jersey 12.2 percent

Wisconsin 11.0 percent

Illinois 11.0 percent

California 11.0 percent

Maryland 10.9 percent

Minnesota 10.8 percent

Rhode Island 10.8 percent

Oregon 10.3 percent

States With the Lowest Tax Burden

Alaska 6.5 percent

South Dakota 7.1 percent

Wyoming 7.1 percent

Tennessee 7.3 percent

Texas 7.6 percent

Louisiana 7.6 percent

New Hampshire 7.9 percent

Nevada 8.1 percent

South Carolina 8.4 percent

Mississippi 8.6 percent

Here is a map of the tax percentages for all the states:


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