States With the Highest and Lowest Taxes

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5. Illinois
> Taxes paid as pct. of income: 11%
> Income per capita: $51,817 (15th highest)
> State income tax collections per capita: $1,076 (22nd highest)
> Property tax collections per capita: $2,087 (9th highest)
> General sales tax collections per capita: $707 (18th lowest)

Homeowners in Illinois face a heavier tax burden than homeowners in nearly every other state. They pay the equivalent of 2% of their home value in state and local property taxes every year, the second highest rate of any state and nearly double the average across all states. The higher than average burden on homeowners means the state is more dependent than most on property taxes. An estimated 36.4% of state and local tax revenue in Illinois comes from property taxes compared to the 31.1% average across all states.

Source: Thinkstock

4. Wisconsin
> Taxes paid as pct. of income: 11%
> Income per capita: $46,762 (24th highest)
> State income tax collections per capita: $1,297 (11th highest)
> Property tax collections per capita: $1,616 (14th highest)
> General sales tax collections per capita: $876 (23rd lowest)

In Wisconsin, 11% of residents’ income goes to state and local governments in the form of taxes, the fourth highest tax burden among states. Homeowners in the state are hit especially hard, paying an average of 1.8% of their home value in property taxes annually, the fourth highest effective property tax burden of any state.

In recent months, Wisconsin lawmakers have made efforts to reduce the tax burden residents shoulder. The state legislature recently issued a $122 million tax rebate and then approved a tax conformity measure expected to further lower the strain on taxpayers.

Source: Thinkstock

3. New Jersey
> Taxes paid as pct. of income: 12.2%
> Income per capita: $61,472 (3rd highest)
> State income tax collections per capita: $1,488 (7th highest)
> Property tax collections per capita: $3,074 (the highest)
> General sales tax collections per capita: $1,032 (16th highest)

Local governments in New Jersey heavily depend on property taxes. An estimated 46.1% of state and local tax revenue in the state comes from property taxes, the third highest share of any state and well above the average 31.1% share across all states. Homeowners in New Jersey pay an average of 2.2% of their home value, the largest share of any state. New Jersey residents not only pay the highest share in property taxes, but also they pay them on high property value — which further contributes to tax revenue to municipalities across the state. The typical home in New Jersey is worth $328,200, the fourth highest median home value of any state.

The state Senate unanimously approved a bill earlier this year in an effort to reduce the tax burden shouldered by homeowners. The bill retroactively allows those who made advance property tax payments in 2017 to receive more favorable deductions before the more burdensome new federal tax laws take effect.

Source: Thinkstock

2. Connecticut
> Taxes paid as pct. of income: 12.6%
> Income per capita: $69,311 (the highest)
> State income tax collections per capita: $2,106 (3rd highest)
> Property tax collections per capita: $2,847 (3rd highest)
> General sales tax collections per capita: $1,046 (15th highest)

Connecticut residents face the highest tax burden of any state in New England and the second highest burden in the country. The state government and municipalities collect the equivalent of $2,279 per person a year in income tax alone, the second highest income tax per capita of any U.S. state. Together with other taxes, the state collects the equivalent of $4,249 in taxes per per person per year, well above the average of $2,869 per capita across all states.

Despite the higher revenue, Connecticut borrows heavily. State and local debt per capita in fiscal 2015 topped $13,000, the third most of any state. Earlier this year, the state agreed to absorb the city of Hartford’s $540 million in debt to help avoid the need for the capital city to file for bankruptcy.

Source: Aurelien Guichard / Flickr

1. New York
> Taxes paid as pct. of income: 12.7%
> Income per capita: $59,563 (4th highest)
> State income tax collections per capita: $2,345 (the highest)
> Property tax collections per capita: $2,697 (4th highest)
> General sales tax collections per capita: $682 (15th lowest)

The tax burden in New York is the highest of any state. On a per capita basis, 12.7% of New Yorkers’ income goes to state and local governments, well above the 9.9% average across all states. State and local governments collected some $8,722 per capita in taxes in fiscal 2015, the second most of any state. In an effort to stimulate the state’s economy, particularly upstate, lawmakers have been cutting, and in some cases eliminating, corporate income taxes. Still, at $211 in 2016, New York State’s per-capita revenue from corporate income tax is 10th highest among states.

While lower corporate tax rates may help stimulate the economy, it is doing little to reduce the state’s substantial debt, at least in the short term. Per-capita state and local debt in fiscal 2015 topped $17,000, by far the most of any state.