States With Highest and Lowest Taxes

Print Email

States With the Highest Taxes:

Source: Thinkstock

10. Oregon
> Taxes paid as pct. of income: 10.3%
> Income per capita: $43,783 (22nd lowest)
> State income tax collections per capita: $1,814 (6th highest)
> Property tax collections per capita: $1,350 (25th highest)
> General sales tax collections per capita: $0 (tied–5th lowest)

More than one in every $10 earned in Oregon goes to state and local governments in the form of taxes. Some 40.8% of all state and local tax revenue in Oregon came from individual income tax in 2014, the largest such share in the country. Oregon is one of a handful of states with no sales tax. Sales taxes often have relatively low rates and are levied across a broad base, and according to Tax Foundation tend to be more beneficial to state economies. Speaking with 24/7 Wall St., Drenkard gave Oregon as an example of how this is not always the case. Revenue seems to be handled well by the state government. Oregon is one of just three states in the country with a fully funded pension system.

Source: Thinkstock

9. Rhode Island
> Taxes paid as pct. of income: 10.8%
> Income per capita: $50,018 (16th highest)
> State income tax collections per capita: $1,151 (17th highest)
> Property tax collections per capita: $2,307 (7th highest)
> General sales tax collections per capita: $908 (25th highest)

An estimated 10.8% of income per capita in Rhode Island goes to state and local governments in the form of taxes, a heavier tax burden than the 9.9% national figure. One factor contributing to Rhode Island’s heavy tax burden is the state’s high sales tax. The state charges a 7% sales tax on goods and services, the highest of any state other than California. The excise tax on gasoline in Rhode Island is 33 cents per gallon, third highest of all states.

Source: Thinkstock

8. Minnesota
> Taxes paid as pct. of income: 10.8%
> Income per capita: $50,871 (14th highest)
> State income tax collections per capita: $1,889 (5th highest)
> Property tax collections per capita: $1,411 (20th highest)
> General sales tax collections per capita: $999 (17th highest)

State and local taxes paid in Minnesota equal 10.8% of the state’s personal income per capita. Nationwide, property taxes account for an average of 31.3% of all state and local tax collections, the largest share compared to other tax types. Minnesota is an exception, as payroll taxes account for the largest share of all state and local tax revenue. Meanwhile, property taxes in the state only makeup for 25.0% of all taxes collected.

Source: Thinkstock

7. Maryland
> Taxes paid as pct. of income: 10.9%
> Income per capita: $55,972 (7th highest)
> State income tax collections per capita: $1,390 (9th highest)
> Property tax collections per capita: $1,491 (16th highest)
> General sales tax collections per capita: $734 (20th lowest)

One of the wealthiest states in the country, Maryland’s income per capita is $55,972 compared to the corresponding $48,112 national figure. Maryland residents also lose a larger share of their paycheck to state and local taxes than is typical. Across the state, 37.4% of all state and local tax revenue comes from personal income, the largest such share of any state with the exception of Oregon. Homeowners and consumers in Maryland catch a break, however. A smaller than average share of state and local tax revenue come from property and sales taxes.


Source: Thinkstock

6. California
> Taxes paid as pct. of income: 11.0%
> Income per capita: $53,741 (10th highest)
> State income tax collections per capita: $1,991 (4th highest)
> Property tax collections per capita: $1,385 (22nd highest)
> General sales tax collections per capita: $983 (19th highest)

California’s annual tax revenue of $151.2 billion is the highest of any state. Even after adjusting for the state’s massive population, California’s effective per capita tax rate as a percentage of income, at 11%, is also higher than all but a handful of other states. State lawmakers are currently debating Senate Bill 1, which would create an estimated $6 billion in annual revenue to improve infrastructure through an increase to the state’s already high 38 cent per gallon gas tax. The state also anticipates an additional $1 billion in annual revenue from tax on marijuana sales.