Special Report

Vermont Has the Highest Effective Tax Rate of Any State

24/7 Wall St. Staff

Published: May 22, 2023 10:31 am

This article was written with the assistance of A.I. technology, and has been edited and fact-checked by Melly Alazraki.

Vermont has the highest effective tax rate of any state, according to the Tax Foundation, an independent, nonprofit, tax policy research organization. Vermont’s tax collections total $6,356 per capita, or 10.3% of the state’s income per capita of $61,882. Both the dollar amount and the tax rate are the highest of all states.

Vermont has a progressive income tax structure, which means that those who earn more money pay a higher tax rate than those who earn less money. And while the state’s 6% sales tax rate ranks 35th highest of all states, the tax rate on capital gains is one of the highest. Vermont is also among a minority of states that impose an estate tax.

Vermont’s property tax rate ranked fourth highest in 2021. The combined state and local property taxes in Vermont accounted for 44.3% of state and local revenue in fiscal 2020, well above the 32.2% national average.

Click here to see where people pay the most in state taxes as a percentage of their income, every state ranked.