Taxes are the single largest source of government revenue in the United States. At the federal level, taxes are levied as a percentage of annual income, and in 2022, the average American paid the equivalent of 14.5% of their annual income to the IRS. For the highest earning 1% of the population, the effective tax rate was 26.5% in 2022, while the lowest earning 50% paid less than 4%. (Here is a look at how the United States compares to the countries with the highest taxes.)
24/7 Wall St. Key Points:
- While all Americans are subject to the same federal tax codes, state and local tax policies vary considerably.
- Due to these variations, some Americans are paying thousands of dollars more in taxes every year than others in the same income bracket.
- Also: 2 Dividend Legends To Hold Forever
But while every U.S. citizen is subject to the same federal tax code, that rate at which Americans are taxed at the state and local levels can vary considerably. Institutions, services, and infrastructure managed by state or local governments — from schools and police departments, to parks and roadways — are funded to a large extent by tax dollars, and partially as a result, those same governments have broad authority to set tax policy.
Revenue for state and local governments is typically derived from some combination of taxes levied on property, income, and consumer sales. Within these categories, tax rates can vary both at the state and municipal levels, and in some parts of the country, these taxes pose a far greater financial burden than in others.
Using the latest available data from the Tax Foundation, an independent, nonprofit, tax policy research organization, 24/7 Wall St. identified the states with the highest effective tax burden. States are ranked by per capita state and local tax collections as a share of income per capita. Calculations used in this ranking, as well as all supplemental data, are also from the Tax Foundation. Federal taxes were not included in this analysis.
Depending on the state, per capita tax collections range from less than $3,000 to more than $12,000. As a percentage of a resident’s income, tax burdens by state range from as little as 4.6% to nearly 16%. (Here is a look at why there is little chance the tax code will be overhauled.)
It is important to note that tax burdens are a product of two factors: taxes and income. As a result, a state with higher per capita tax collections will not necessarily have an especially high tax burden, if incomes are also higher than average. Conversely, in a state with lower than average earnings, low per capita tax collections does not necessarily mean a low tax burden. Still, per capita state and local tax collections have a strong positive correlation with a state’s overall tax burden.
These are the states with the highest and lowest state and local tax burdens.
Why It Matters
Tax Day has come and gone in the United States, and according to the latest available data from the Tax Foundation, the typical American paid about 14.5% of their annual earnings to the federal government in the form of federal income tax. As is the case with the federal government, taxes are also the lifeblood of state and local governments — which have broad authority to set their own revenue policies. As a result, exactly how much Americans paid to their local and state governments in 2025 depends, to a large extent, on where they live. And in some parts of the country, taxes pose a serious financial burden.
50. Alaska
- State and local tax burden on typical resident in 2022: 4.6% of average income
- State and local per capita tax collections in 2022: $2,943 (the lowest of 50 states)
- Income per capita in 2023: $71,611 (16th highest of 50 states)
49. Wyoming
- State and local tax burden on typical resident in 2022: 7.5% of average income
- State and local per capita tax collections in 2022: $4,691 (9th lowest of 50 states)
- Income per capita in 2023: $82,060 (5th highest of 50 states)
48. Tennessee
- State and local tax burden on typical resident in 2022: 7.6% of average income
- State and local per capita tax collections in 2022: $4,036 (2nd lowest of 50 states)
- Income per capita in 2023: $62,229 (16th lowest of 50 states)
47. South Dakota
- State and local tax burden on typical resident in 2022: 8.4% of average income
- State and local per capita tax collections in 2022: $5,196 (19th lowest of 50 states)
- Income per capita in 2023: $72,466 (13th highest of 50 states)
45. Michigan
- State and local tax burden on typical resident in 2022: 8.6% of average income
- State and local per capita tax collections in 2022: $4,720 (10th lowest of 50 states)
- Income per capita in 2023: $61,144 (12th lowest of 50 states)
45. Texas
- State and local tax burden on typical resident in 2022: 8.6% of average income
- State and local per capita tax collections in 2022: $4,994 (15th lowest of 50 states)
- Income per capita in 2023: $66,252 (24th highest of 50 states)
44. North Dakota
- State and local tax burden on typical resident in 2022: 8.8% of average income
- State and local per capita tax collections in 2022: $5,403 (22nd lowest of 50 states)
- Income per capita in 2023: $72,041 (15th highest of 50 states)
42. South Carolina
- State and local tax burden on typical resident in 2022: 8.9% of average income
- State and local per capita tax collections in 2022: $4,596 (7th lowest of 50 states)
- Income per capita in 2023: $57,332 (6th lowest of 50 states)
42. Georgia
- State and local tax burden on typical resident in 2022: 8.9% of average income
- State and local per capita tax collections in 2022: $4,862 (13th lowest of 50 states)
- Income per capita in 2023: $59,882 (10th lowest of 50 states)
41. Oklahoma
- State and local tax burden on typical resident in 2022: 9.0% of average income
- State and local per capita tax collections in 2022: $4,527 (5th lowest of 50 states)
- Income per capita in 2023: $60,545 (11th lowest of 50 states)
39. Louisiana
- State and local tax burden on typical resident in 2022: 9.1% of average income
- State and local per capita tax collections in 2022: $4,762 (11th lowest of 50 states)
- Income per capita in 2023: $58,845 (8th lowest of 50 states)
39. Florida
- State and local tax burden on typical resident in 2022: 9.1% of average income
- State and local per capita tax collections in 2022: $5,406 (23rd lowest of 50 states)
- Income per capita in 2023: $68,703 (19th highest of 50 states)
37. Missouri
- State and local tax burden on typical resident in 2022: 9.3% of average income
- State and local per capita tax collections in 2022: $4,953 (14th lowest of 50 states)
- Income per capita in 2023: $62,604 (18th lowest of 50 states)
37. Indiana
- State and local tax burden on typical resident in 2022: 9.3% of average income
- State and local per capita tax collections in 2022: $5,030 (16th lowest of 50 states)
- Income per capita in 2023: $61,243 (13th lowest of 50 states)
36. Arizona
- State and local tax burden on typical resident in 2022: 9.5% of average income
- State and local per capita tax collections in 2022: $5,156 (18th lowest of 50 states)
- Income per capita in 2023: $62,543 (17th lowest of 50 states)
33. Kentucky
- State and local tax burden on typical resident in 2022: 9.6% of average income
- State and local per capita tax collections in 2022: $4,669 (8th lowest of 50 states)
- Income per capita in 2023: $55,360 (5th lowest of 50 states)
33. Nevada
- State and local tax burden on typical resident in 2022: 9.6% of average income
- State and local per capita tax collections in 2022: $5,554 (25th lowest of 50 states)
- Income per capita in 2023: $66,238 (25th highest of 50 states)
33. New Hampshire
- State and local tax burden on typical resident in 2022: 9.6% of average income
- State and local per capita tax collections in 2022: $6,593 (20th highest of 50 states)
- Income per capita in 2023: $78,944 (9th highest of 50 states)
32. Colorado
- State and local tax burden on typical resident in 2022: 9.7% of average income
- State and local per capita tax collections in 2022: $6,699 (19th highest of 50 states)
- Income per capita in 2023: $80,068 (8th highest of 50 states)
29. Mississippi
- State and local tax burden on typical resident in 2022: 9.8% of average income
- State and local per capita tax collections in 2022: $4,220 (3rd lowest of 50 states)
- Income per capita in 2023: $49,652 (the lowest of 50 states)
29. West Virginia
- State and local tax burden on typical resident in 2022: 9.8% of average income
- State and local per capita tax collections in 2022: $4,479 (4th lowest of 50 states)
- Income per capita in 2023: $52,826 (2nd lowest of 50 states)
29. Alabama
- State and local tax burden on typical resident in 2022: 9.8% of average income
- State and local per capita tax collections in 2022: $4,585 (6th lowest of 50 states)
- Income per capita in 2023: $54,209 (3rd lowest of 50 states)
28. North Carolina
- State and local tax burden on typical resident in 2022: 9.9% of average income
- State and local per capita tax collections in 2022: $5,299 (20th lowest of 50 states)
- Income per capita in 2023: $61,839 (15th lowest of 50 states)
27. Ohio
- State and local tax burden on typical resident in 2022: 10.0% of average income
- State and local per capita tax collections in 2022: $5,530 (24th lowest of 50 states)
- Income per capita in 2023: $61,495 (14th lowest of 50 states)
25. New Mexico
- State and local tax burden on typical resident in 2022: 10.2% of average income
- State and local per capita tax collections in 2022: $4,835 (12th lowest of 50 states)
- Income per capita in 2023: $55,343 (4th lowest of 50 states)
25. Arkansas
- State and local tax burden on typical resident in 2022: 10.2% of average income
- State and local per capita tax collections in 2022: $5,031 (17th lowest of 50 states)
- Income per capita in 2023: $57,635 (7th lowest of 50 states)
24. Montana
- State and local tax burden on typical resident in 2022: 10.5% of average income
- State and local per capita tax collections in 2022: $5,795 (25th highest of 50 states)
- Income per capita in 2023: $64,989 (22nd lowest of 50 states)
23. Pennsylvania
- State and local tax burden on typical resident in 2022: 10.6% of average income
- State and local per capita tax collections in 2022: $6,723 (17th highest of 50 states)
- Income per capita in 2023: $68,945 (18th highest of 50 states)
21. Idaho
- State and local tax burden on typical resident in 2022: 10.7% of average income
- State and local per capita tax collections in 2022: $5,402 (21st lowest of 50 states)
- Income per capita in 2023: $59,385 (9th lowest of 50 states)
21. Washington
- State and local tax burden on typical resident in 2022: 10.7% of average income
- State and local per capita tax collections in 2022: $7,803 (9th highest of 50 states)
- Income per capita in 2023: $80,930 (7th highest of 50 states)
20. Oregon
- State and local tax burden on typical resident in 2022: 10.8% of average income
- State and local per capita tax collections in 2022: $6,572 (21st highest of 50 states)
- Income per capita in 2023: $67,838 (20th highest of 50 states)
19. Wisconsin
- State and local tax burden on typical resident in 2022: 10.9% of average income
- State and local per capita tax collections in 2022: $6,231 (23rd highest of 50 states)
- Income per capita in 2023: $64,976 (21st lowest of 50 states)
17. Iowa
- State and local tax burden on typical resident in 2022: 11.2% of average income
- State and local per capita tax collections in 2022: $6,086 (24th highest of 50 states)
- Income per capita in 2023: $62,779 (19th lowest of 50 states)
17. Kansas
- State and local tax burden on typical resident in 2022: 11.2% of average income
- State and local per capita tax collections in 2022: $6,353 (22nd highest of 50 states)
- Income per capita in 2023: $66,115 (24th lowest of 50 states)
16. Maryland
- State and local tax burden on typical resident in 2022: 11.3% of average income
- State and local per capita tax collections in 2022: $7,680 (11th highest of 50 states)
- Income per capita in 2023: $75,391 (10th highest of 50 states)
15. Rhode Island
- State and local tax burden on typical resident in 2022: 11.4% of average income
- State and local per capita tax collections in 2022: $6,948 (14th highest of 50 states)
- Income per capita in 2023: $67,562 (21st highest of 50 states)
13. Nebraska
- State and local tax burden on typical resident in 2022: 11.5% of average income
- State and local per capita tax collections in 2022: $6,720 (18th highest of 50 states)
- Income per capita in 2023: $71,347 (17th highest of 50 states)
13. Massachusetts
- State and local tax burden on typical resident in 2022: 11.5% of average income
- State and local per capita tax collections in 2022: $7,565 (12th highest of 50 states)
- Income per capita in 2023: $90,596 (the highest of 50 states)
11. Utah
- State and local tax burden on typical resident in 2022: 12.1% of average income
- State and local per capita tax collections in 2022: $6,750 (16th highest of 50 states)
- Income per capita in 2023: $64,175 (20th lowest of 50 states)
11. Minnesota
- State and local tax burden on typical resident in 2022: 12.1% of average income
- State and local per capita tax collections in 2022: $7,763 (10th highest of 50 states)
- Income per capita in 2023: $72,557 (12th highest of 50 states)
9. Maine
- State and local tax burden on typical resident in 2022: 12.4% of average income
- State and local per capita tax collections in 2022: $6,906 (15th highest of 50 states)
- Income per capita in 2023: $65,105 (23rd lowest of 50 states)
9. Delaware
- State and local tax burden on typical resident in 2022: 12.4% of average income
- State and local per capita tax collections in 2022: $7,170 (13th highest of 50 states)
- Income per capita in 2023: $66,850 (23rd highest of 50 states)
8. Virginia
- State and local tax burden on typical resident in 2022: 12.5% of average income
- State and local per capita tax collections in 2022: $7,979 (7th highest of 50 states)
- Income per capita in 2023: $73,841 (11th highest of 50 states)
7. Illinois
- State and local tax burden on typical resident in 2022: 12.9% of average income
- State and local per capita tax collections in 2022: $8,390 (6th highest of 50 states)
- Income per capita in 2023: $72,245 (14th highest of 50 states)
6. New Jersey
- State and local tax burden on typical resident in 2022: 13.2% of average income
- State and local per capita tax collections in 2022: $9,648 (4th highest of 50 states)
- Income per capita in 2023: $82,103 (4th highest of 50 states)
5. California
- State and local tax burden on typical resident in 2022: 13.5% of average income
- State and local per capita tax collections in 2022: $10,167 (3rd highest of 50 states)
- Income per capita in 2023: $81,255 (6th highest of 50 states)
4. Vermont
- State and local tax burden on typical resident in 2022: 13.6% of average income
- State and local per capita tax collections in 2022: $7,958 (8th highest of 50 states)
- Income per capita in 2023: $66,932 (22nd highest of 50 states)
3. Hawaii
- State and local tax burden on typical resident in 2022: 14.1% of average income
- State and local per capita tax collections in 2022: $8,410 (5th highest of 50 states)
- Income per capita in 2023: $66,175 (25th lowest of 50 states)
2. Connecticut
- State and local tax burden on typical resident in 2022: 15.4% of average income
- State and local per capita tax collections in 2022: $12,151 (the highest of 50 states)
- Income per capita in 2023: $89,945 (2nd highest of 50 states)
1. New York
- State and local tax burden on typical resident in 2022: 15.9% of average income
- State and local per capita tax collections in 2022: $12,083 (2nd highest of 50 states)
- Income per capita in 2023: $82,323 (3rd highest of 50 states)
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