Any economy needs taxes to function. They supply the money for crucial government programs like public healthcare, education, and infrastructure. But when it comes to taxes, not every state in the US is created equal. Some states have greater taxes than others, which deters both people and businesses from relocating there. We’ll look at some of the states in the US with the highest tax burdens in this article.
One of the worst states for taxes is frequently mentioned as being California. With a top rate of 13.3%, the state has the highest income tax rate in the nation. Additionally, the average sales tax rate is high at 8.66%. California has high property taxes as well, with an average effective tax rate of 0.77%. California is one of the least tax-friendly states in the nation as a result of all of these reasons. Another state that is frequently cited as having one of the highest tax burdens is New York. With a maximum rate of 8.82%, the state has a high income tax rate. New York likewise has high sales tax rates, with an average of about 8.48%. With an average effective tax rate of 1.68%, the state has among of the highest property taxes in the nation. When you add up all of these taxes, it becomes clear why New York is regarded as one of the states with the highest tax burdens.
Another state with high taxes is Illinois. Although the state has a flat income tax rate of 4.95%, its sales tax rates are high. In Illinois, the standard sales tax rate is about 8.78%. The average effective tax rate on property in the state is high at 2.31%. When you add up all of these taxes, it’s clear why Illinois is regarded as one of the states with the highest tax burdens.
After examining some of the states with the highest tax burdens, let’s examine the state with the lowest tax burden. Alaska deserves that distinction. The state does not impose an income tax, a sales tax, or a real estate tax. As a result, both individuals and businesses find it to be one of the most appealing states.
Vermont imposes a sugar tax as well. Beverages with added sugar are subject to a 2-cent-per-ounce levy by the state. The purpose of this tariff is to promote the avoidance of sugary beverages.
Finally, Social Security payouts are not subject to tax in Vermont. The fact that it does not tax these benefits makes it one of the few states in the union. For retirees who depend on Social Security as their main source of income, this can be a significant advantage.
To sum up, taxes play a significant role in every economy, although different states have different tax policies. Alaska is frequently regarded as the state with the lowest taxes, whereas California, New York, and Illinois are among the states with the highest taxes. Vermont levies taxes on alcoholic beverages and sugary beverages but not on Social Security benefits.