Cities with the Highest Tax Burdens
10. Baltimore, Md.
> Taxes for family earning $25,000: $2,703 (13th lowest)
> Taxes for family earning $150,000: $17,134 (6th highest)
> Unemployment rate: 9.9% (10th highest)
Baltimore has one of the highest income tax burdens of all the cities. In 2011, a family of three earning $50,000 would have paid $1,818 in income taxes, the ninth highest burden of all largest cities. For a family earning $100,000, the income tax burden was $5,511, the sixth highest. In addition, property taxes in the city were higher than most other largest cities, especially for higher-income families. It is also the largest property tax in the state. According to The Baltimore Sun, mayor Stephanie Rawlings-Blake has expressed interest in lowering the city’s property tax rate to make it more competitive.
9. Detroit, Mich.
> Taxes for family earning $25,000: $3,270 (17th highest)
> Taxes for family earning $150,000: $15,522 (10th highest)
> Unemployment rate: 18.2% (the highest)
Detroit residents have among the highest tax burdens of all cities, but it is especially high for those with higher incomes. For families of three earning over $75,000, Detroit’s income taxes are among the top five of all the cities reviewed. The high tax burden on its residents has not translated into a healthy economy — Detroit’s finances are still in havoc. A state review found that the city has more than $14 billion in long-term liabilities and a budget deficit of at least $327 million annually. Michigan Governor Rick Snyder will decide in the coming weeks whether to have the state intervene to help rebuild the city, with options including Chapter 9 bankruptcy on the table.
8. Los Angeles, Calif.
> Taxes for family earning $25,000: $3,425 (10th highest)
> Taxes for family earning $150,000: $15,764 (9th highest)
> Unemployment rate: 11.3% (4th highest)
For all levels of income, Los Angeles has one of the highest property tax burdens on its residents among the largest cities. This is despite the city’s low effective property tax rate, which at $1.13 per $100 was one of the lowest for all cities. In 2011, Los Angeles had the highest assumed home value — used to calculate property tax payments — for each income bracket between $50,000 and $150,000. In addition to high property taxes, Angelenos also pay one of the highest total sales tax rates, at 8.75 cents on the dollar — more than two cents over the average city sales tax.
7. New York, N.Y.
> Taxes for family earning $25,000: $3,273 (16th highest)
> Taxes for family earning $150,000: $18,8111 (3rd highest)
> Unemployment rate: 8.8% (16th highest)
Among the cities measured, only New York City had graduated state and local income tax rates as of 2011. This means that the income tax rate rises as individuals’ earnings rise. In 2011, a family of three with two working parents earning $25,000 a year paid no income tax while a similar family earning $150,000 per year paid $12,464 in income tax — more than such a family would pay in any other city reviewed. No other city measured had a higher city-level sales tax than New York City’s 4.5%. This contributes to an effective sales tax rate of 8.875%, among the nation’s highest. According to the Nelson A. Rockefeller Institute of Government, in the fiscal year 2009-2010 New York City residents paid about $4.1 billion more in taxes than they received in government services.
6. Newark, N.J.
> Taxes for family earning $25,000: $2,999 (25th highest)
> Taxes for family earning $150,000: $16,032 (8th highest)
> Unemployment rate: 7.6% (23rd highest)
Newark residents can expect to pay a substantial share of their income to the government. Not all taxes are high in the city. Newark residents do not pay state or local income tax. Newark also has either the lowest or second lowest auto taxes of all cities measured, depending on a family’s income, and is also in the lower half of cities in terms of sales tax. However, Newark residents are hammered through property taxes — for families making more than $50,000 a year in 2011, property taxes were the second-highest among all cities measured.