Each year, Americans dread April 15 — Tax Day. However, the IRS announced in March that American taxpayers would have an extra month to file their federal income taxes, pushing Tax Day to May 17 due to the COVID-19 pandemic. However, state filings will still proceed as planned in most places.
In 2019, the average state and local tax burden was 10.3% of income, but this figure varied widely from state to state. It ranged from less than 6% to over 14%, meaning differences of thousands of dollars in a given year.
To determine the state where Americans are paying the most taxes, 24/7 Wall St. reviewed data on state tax burdens from tax policy nonprofit the Tax Foundation. States were ranked based on state and local taxes paid by each state’s residents as a percentage of that state’s net national product in 2019. State income figures are based on net national product, which measures the value of goods and services produced by U.S. residents, minus the value of the fixed capital used in production, or depreciation, and is effectively equivalent to net national income plus taxes. Estimates of state and local taxes reflect tax payments made to state and local governments.
States with higher incomes also tend to have higher tax burdens. The typical U.S. income, as determined by the net national product per capita, was $55,874 in 2019. Each of the five states with incomes exceeding $65,000 had tax burdens that were higher than the national burden of 10.3%. Of the 21 states with incomes below $50,000, just one had a tax burden that exceeded 10.3%.
In calculating tax burdens, the Tax Foundation included different kinds of taxes, such as those on purchases like property, public utilities, alcohol, fuel and general sales, as well as taxes on incomes, inheritance and many other financial transactions. Property taxes can sometimes make up a large share of total tax burdens, depending on the state in which the property is located. While some states have property taxes of less than $1,000 per capita, residents of other states pay over $3,000 per person in property taxes.
New York is the state with the highest taxes:
> Taxes paid as pct. of income: 14.1%
> Total taxes paid per capita: $9,987 (the highest)
> Income per capita: $70,830 (third highest)
Click here to see all the states with the highest taxes.
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.