Special Report
American Cities With the Highest (and Lowest) Taxes
February 25, 2013 6:21 am
Last Updated: April 27, 2020 3:46 pm
5. Chicago, Ill.
> Taxes for family earning $25,000: $3,898 (4th highest)
> Taxes for family earning $150,000: $14,814 (14th highest)
> Unemployment rate: 9.7% (12th highest)
As of 2011, Chicago residents paid the highest effective sales tax rate of any city studied, at 9.75%. This increased the tax burden for lower-income earners, who paid a higher percentage of their income in sales taxes. Partly because of the city’s sales tax, a Chicago family earning $25,000 had a state and local tax burden equal to 15.6% of their income, while for a family earning $150,000, the figure was just 9.9%. Poorer residents are also burdened by the state-level flat income tax, which was raised from 3% to 5% in 2011.
Also Read: The States with the Most Homes in Foreclosure
4. Louisville, Ky.
> Taxes for family earning $25,000: $3,594 (8th highest)
> Taxes for family earning $150,000: $18,008 (5th highest)
> Unemployment rate: 7.9% (20th highest)
For a family of three that earned between $100,000 and $150,000, the average tax burden was 12%, higher than all but four other cities reviewed. The tax burden for people earning $25,000 to $50,000, although higher at 14.4%, is less of jump compared to most of the cities on this list. The 14.4% tax burden is the eighth highest out of all the cities measured. The biggest tax burden comes from income taxes. Depending on a family’s income, Louisville has either the second or third highest income tax among all cities measured.
3. Columbus, Ohio
> Taxes for family earning $25,000: $3,369 (12th highest)
> Taxes for family earning $150,000: $18,241 (4th highest)
> Unemployment rate: 6.5% (23rd lowest)
Columbus residents are hit by the one-two punch of sales and property taxes that are higher than most. For instance, a family of three earning $50,000 in 2011 had to fork over $2,116.50 in income taxes and had to pay an additional $4,025 in property taxes. The income tax burden was higher than all but four cities, while the property tax burden was higher than all but five. Not all is bad, though. The sales tax and auto tax burden across all incomes were in the lower half of cities reviewed.
2. Philadelphia, Penn.
> Taxes for family earning $25,000: $4,513 (2nd highest)
> Taxes for family earning $150,000: $19,951 (2nd highest)
> Unemployment rate: 10.6% (7th highest)
A family of three that made just $25,000 a year in 2011 would have been stuck with a tax burden worth a whopping 18.1% of their income, tied with Birmingham, Ala., for the highest of all cities. Taxes did ease a bit as one moved down the sliding scale, although burdens were still near the top. For a family of three making $150,000 in 2011, the total tax burden was 13.3% — the second highest of all cities measured by the report.
1. Bridgeport, Conn.
> Taxes for family earning $25,000: $3,708 (5th highest)
> Taxes for family earning $150,000: $23,501 (the highest)
> Unemployment rate: 11.7% (3rd highest)
No city taxed its residents more heavily than Bridgeport in 2011. In 2011, its effective residential property tax rate was $2.77 per every $100 in assessed home value — the sixth highest in the nation. Citizens are also paying more in property taxes, due to the high value of homes in the area, at over $434,000 for a person earning $150,000 a year. In defending his city to the Connecticut Post, Bridgeport Mayor Bill Finch noted the average resident paid only $6,431 in taxes a year and notes that the city’s residents are “of modest means” and that residents’ tax rates are also affected by the close proximity of far wealthier cities. The median household income in Bridgeport is just $35,379, more than $15,000 below than the national median.
Also Read: The World’s Most and Least Livable Cities
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