States with the Highest (and Lowest) Taxes

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5. Wisconsin
> Taxes paid by residents as pct. of income: 11.1%
> Total state and local taxes collected: $24.39 billion (16th highest)
> Pct. of total taxes paid by residents: 77.7% (8th highest)
> Pct. of total taxes paid by non-residents: 22.3% (8th lowest)

Wisconsin’s heavy tax burden on residents comes from the state’s tax structure. The Milwaukee Journal Sentinel noted in 2010 that the Wisconsin relies heavily on property and income taxes since it doesn’t collect as much in user fees such as tolls and garbage collection rates. Because property taxes were the same rate across the state a larger share of the tax burden was placed on middle-income homeowners compared to states where the wealthy have higher tax burdens. Meanwhile, Wisconsin’s cigarette and gas excise taxes were both among the 10 highest in the U.S.

4.California
> Taxes paid by residents as pct. of income: 11.2%
> Total state and local taxes collected: $172.63 billion (the highest)
> Pct. of total taxes paid by residents: 84.5% (the highest)
> Pct. of total taxes paid by non-residents: 15.5% (the lowest)

In 2010, the state collected individual income taxes amounting to $1,229 a person, the fifth-highest in the country. There were seven different tax brackets in California, with income over $1 million for both individuals and couples taxed at 10.3%, higher than all top tax rates with the exception of Hawaii’s. Currently, the state levies a 7.25% general sales or use tax — the highest in the country. Those who refuel in California had to pay 36 cents per gallon in excise taxes and fees — the third-highest amount in the country.

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3. Connecticut
> Taxes paid by residents as pct. of income: 12.3%
> Total state and local taxes collected: $21.41 billion (19th highest)
> Pct. of total taxes paid by residents: 80.7% (4th highest)
> Pct. of total taxes paid by non-residents: 19.3% (4th lowest)

The 12.3% of resident income paid in taxes was up from 12% in 2009, although Connecticut was ranked the third highest in both years. Connecticut residents paid just under $7,000 per person in 2010, the highest amount in the country. However, in 2011 the legislature enacted a higher sales tax, cigarette tax and corporate income surcharge, and instituted a luxury goods tax. Although the effects aren’t yet clear, the changes are expected to bring in an additional $2.5 billion in a two-year time span. The cost of living in Connecticut was higher than in all but five states and property taxes were the second- highest in the country per person.

2. New Jersey
> Taxes paid by residents as pct. of income: 12.4%
> Total state and local taxes collected: $51.10 billion (7th highest)
> Pct. of total taxes paid by residents: 81.4% (3rd highest)
> Pct. of total taxes paid by non-residents: 18.6% (3rd lowest)

Since The Tax Foundation started ranking tax burdens in 1977, New Jersey has always been ranked in the top five states with the heaviest tax burdens. Property tax collections per capita of $2,671 were the highest in the nation. The percentage of New Jersey’s total taxes paid by residents of 81.4% was much higher than that of neighboring New York, at 73.3%. Only Connecticut residents paid more to other states on things like sales and excise taxes than the $1,836 New Jersey residents paid. In 2010, the state collected $1,176 per capita in personal income tax, the seventh most in the country.

1. New York
> Taxes paid by residents as pct. of income: 12.8%
> Total state and local taxes collected: $136.24 billion (2nd highest)
> Pct. of total taxes paid by residents: 73.3% (19th highest)
> Pct. of total taxes paid by non-residents: 26.7% (19th lowest)

New York’s tax rate of 12.8% of income was up from 12.1% in 2009, when it was second to New Jersey. Currently, the state has eight different tax levels, ranging from 4% for taxable income under $8,000 all the way up to 8.82% for income over $1 million. In addition to federal and state taxes, residents of New York City were required to pay a local income tax, commonly referred to as the city tax. Property taxes were very high in New York, too. The median property tax in Westchester County in 2008 was $8,404 annually, more than any other county in the U.S. New York also had the highest cigarette tax in the country at $4.35.

Also Read: States with the Lowest Taxes