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5 States With The Highest State Income Tax Burdens

Depending on your income in 2021, you may be feeling the pain of
paying your state and federal income taxes. Some of you reading this
post may be feeling a bit more pain based on the state within which
you live, how you earn your income, and whether or not you own a home.
The overall tax burden can vary widely from state to state.

While seven states boast of not having an income tax, this doesn’t
mean you get to live tax-free. They have to fund the state budgets
somehow. If you were wondering, the seven states without an income tax
are Nevada, Washington, South Dakota, Texas, Florida, Wyoming, and
Alaska.

Income taxes are just one part of the overall tax burden of living in
a state. Your personal tax burden at the state level can vary widely
depending on your financial circumstances. Your tax burden is the
proportion of your total personal income required to cover your state
and local taxes. The most common types of state and local taxes are
personal income taxes, sales taxes, capital gains taxes, and property
taxes.

WalletHub compared all 50 states across the three most common types of
taxation – property taxes, income taxes, and sales taxes- as a share
of your personal income to determine the five states with the highest
state tax burdens.

1. Highest State Tax Burden: New York

Ranking New York as the state with the highest tax burden should not
be surprising. It has high property values, which lead to high
property taxes. New York also has high incomes paired with high tax
rates, leading to a high proportion of income needed to cover state
income taxes. Lastly, the Empire State also brings in revenue via its
sales taxes.

Total tax burden: 12.75%
Property tax burden: 4.43% (rank: 6)
Individual income tax burden: 4.90% (rank: 1 = highest)
Total sales & excise tax burden: 3.42% (rank: 25)

2. Second Highest State Tax Burden: Hawaii

Hawaii may be paradise, with many gorgeous beaches and tropical
forests. However, the tax burden in Hawaii is not far behind New York.

Total tax burden: 12.70%
Property tax burden: 2.55% (rank: 34)
Individual income tax burden: 3.18% (rank: 8)
Total sales & excise tax burden: 6.97% (rank: 1 = highest)

3. State with the Third Highest Tax Burden: Maine

Total tax burden: 11.42%
Property tax burden: 5.48% (rank: 1 = highest)
Individual income tax burden: 2.51% (rank: 21)
Total sales & excise tax burden: 3.43% (rank: 24)

4. Fourth Highest Tax Burden: Vermont

Total tax burden: 11.13%
Property tax burden: 5.31% (rank: 2)
Individual income tax burden: 2.49% (rank: 22)
Total sales & excise tax burden: 3.33% (rank: 27)

5. Fifth Highest Tax Burden: Minnesota

Total tax burden: 10.20%
Property tax burden: 2.93% (rank: 22)
Individual income tax burden: 3.74% (rank: 5)
Total sales & excise tax burden: 3.53% (rank: 22)

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