States With the Highest and Lowest Taxes

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States With the Highest Taxes

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12. Massachusetts
> Taxes paid as pct. of income: 10.3%
> Income per capita: $64,235 (2nd highest)
> State income tax collections per capita: $2,115 (2nd highest)
> Property tax collections per capita: $2,258 (8th highest)
> General sales tax collections per capita: $892 (24th lowest)

New England is one of the most heavily taxed regions in the United States. In Massachusetts, an estimated 10.3% of taxpayer income goes to state and local taxes, above the 9.9% average across all states. One of the wealthiest states in the country, the typical Massachusetts household earns $75,297 a year, nearly $18,000 more than the typical American household. Due in part to high incomes, a larger than typical share of state and local tax revenue in Massachusetts comes from income tax. Income tax accounts for 33.6% of state and local revenue in Massachusetts compared to the 23.5% average across all states.

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11. Vermont
> Taxes paid as pct. of income: 10.3%
> Income per capita: $49,984 (20th highest)
> State income tax collections per capita: $1,171 (15th highest)
> Property tax collections per capita: $2,542 (5th highest)
> General sales tax collections per capita: $596 (11th lowest)

Vermonters pay an average of 10.3% of their income in state and local taxes every year, one of the highest shares of any state. Vermonters pay more in taxes on average than residents of any other state. The state collects an average of $4,950 per taxpayer annually, the most of any state and about $2,000 more than is typical across all states.

Property taxes account for a larger than typical share of state revenue in Vermont. An estimated 43.8% of state and local revenue comes from property taxes, well above the 31.1% average share across all states.

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10. Oregon
> Taxes paid as pct. of income: 10.3%
> Income per capita: $45,399 (23rd lowest)
> State income tax collections per capita: $1,882 (6th highest)
> Property tax collections per capita: $1,404 (24th highest)
> General sales tax collections per capita: None

Oregon is one of just five states with no sales tax. Despite the break consumers receive in the checkout line, Oregon has one of the highest effective tax rates in the country. Taxpayers in the state pay about 10.3% of their income in non-federal taxes annually, more than in all but nine other states.

With fewer revenue streams than most states, a larger share than typical of state and local revenue in Oregon comes from personal income tax. An estimated 41.6% of state and local revenue comes directly from residents’ paychecks in the form of personal income tax, the largest share of any state and well above the 23.5% average across all states.

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9. Rhode Island
> Taxes paid as pct. of income: 10.8%
> Income per capita: $50,427 (17th highest)
> State income tax collections per capita: $1,169 (16th highest)
> Property tax collections per capita: $2,339 (7th highest)
> General sales tax collections per capita: $921 (25th lowest)

Rhode Island is one of several New England states to rank among those with the highest effective tax burden. The high tax burden is driven in part by the state’s 7.0% sales tax — the second highest sales tax rate of among states. Property taxes are also high in Rhode Island. State and local authorities in Rhode Island collect the equivalent of $2,339 per person in property taxes annually, more than in all but six other states. Property taxes account for 43.2% of the state’s revenue, a larger share than in all but four other states.

Rhode Island has reduced corporate taxes in recent years in an attempt to spur economic growth. Corporations have benefitted from hundreds of millions of dollars in tax breaks in the last 10 years alone, and currently, per capita tax business tax collections are lower in Rhode Island than the average across all states.

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8. Minnesota
> Taxes paid as pct. of income: 10.8%
> Income per capita: $52,038 (13th highest)
> State income tax collections per capita: $1,943 (5th highest)
> Property tax collections per capita: $1,534 (17th highest)
> General sales tax collections per capita: $1,011 (18th highest)

Minnesota taxes the purchase of products like cigarettes and alcoholic beverage more than most states, which likely contributes to the state’s higher that typical revenue revenue per capita from excise taxes. State and local excise governments collected in the equivalent of $849 per person in excise taxes in 2017, more than all but three other states.

Minnesota residents are also taxed more on their income than most Americans. The state collected nearly $2,000 per person in income tax alone in fiscal 2016, more than in all but four other states. Income tax accounts for 31.8% of state and local revenue in Minnesota, well above the 23.5% average across all states.

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7. Maryland
> Taxes paid as pct. of income: 10.9%
> Income per capita: $58,052 (5th highest)
> State income tax collections per capita: $1,414 (10th highest)
> Property tax collections per capita: $1,555 (16th highest)
> General sales tax collections per capita: $748 (20th lowest)

The typical household in Maryland earns $78,945 a year, the highest median income of any state. The strong tax base is a boon for state and local governments in Maryland. Some 37.6% of tax revenue in the state comes from income taxes, the second largest share of any state and well above the 23.5% average across all states.

Maryland also has a higher than typical excise tax rate on a number of products, including wine, beer, and cigarettes. Partially as a result, the state’s excise tax per capita collection of $816 in 2017 was higher than in all but three other states.

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6. California
> Taxes paid as pct. of income: 11%
> Income per capita: $56,374 (6th highest)
> State income tax collections per capita: $2,055 (4th highest)
> Property tax collections per capita: $1,451 (21st highest)
> General sales tax collections per capita: $997 (21st highest)

An estimated 11% of income per capita in California goes to state and local governments in the form of taxes, a heavier tax burden than the 9.9% average across all states. Like many states with the highest tax burdens, a relatively large share of California’s revenue comes from personal income tax. Some 34.1% of state and local revenue comes directly out of workers’ paychecks, a higher share than in all but two other states. Not only is California heavily reliant on personal income, but also it collects far more than typical in corporate income. The state brought in $252 per capita in fiscal 2016 in corporate income tax, more than in all but six other states.