What States Have the Highest and Lowest Taxes?

by Isabella Craig on 2013/05/04

Taxes paid by residents are like the fuel that runs the government. There are many types of taxes, like sales tax, customs, income tax, and others. The tax rates that are levied by government on the residents are directly related to the ability of the government to boost its income while increasing the earning opportunities for its residents.

While this determines the taxes that should be paid by residents, there are other taxes too which are paid by non-residents of the states. These taxes include  customs, sales tax, corporate tax, etc. States with a large oil infrastructure will usually have the non-resident tax in a bigger percentage. Louisiana, Alaska, and Wyoming are states which manage to collect 46% of their total taxes from people who are non-residents.

States with the Highest Taxes

New York is the highest tax paying state. People do not mind paying a huge portion of their income as tax, to an extent of 12.8%. So if a person earns $ 100,000 per annum, he pays $ 12,800 as tax. New York is also famous for its high cigarette tax.

New Jersey is the second highest tax paying state. It takes 12.4% as the tax from the earnings of its residents.

Connecticut secures the third place by charging 12.3% of the total earnings of the people who live there. Connecticut has high property taxes and a very high cost of living as well.

California is the fourth state that charges high taxes. It charges 11.2% of the total earnings as tax. The fuel taxes are high here due to the high customs. So remember, if you are passing through California, ensure you have your car’s tank full. If you must refill in California, you will need to pay 36 cents extra per gallon.

Wisconsin is another one of those high taxes levying states. This state has its residents paying 11.1% of their total income as tax every year. This is huge.

States with the Lowest Taxes

If you are looking for the lowest taxpaying rates, then here is the good news. These are the states where the taxes are relatively low compared to other places.
Alaska is the lowest tax charging state in USA. It charges 7% of the total income as tax per person.

South Dakota is the second lowest taxpaying state. It charges 7.6% of the total income as tax. This is because they do not have corporate and personal tax.

Tennessee too is a beautiful state in the US with only 7.7 % tax charged per person. There are no property taxes too.

Louisiana scores a fourth place as one of the lowest taxpaying states. The tax on the people here reduced from 8.2% to an even lower tax of 7.8% of a person’s total earnings. Where the national rate of income tax per person stands at 767$ per annum, this state charges 500$ per person.

Wyoming is the fifth lowest taxpaying state. This is also the city where the tax paid by a non- resident is very high as compared to the other states.

So, it is important to be aware of which state is charging how much tax to be able to decide on the best place to live in. Which would you choose?

Courtesy of CreditCardShoppe.com


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