About half of the $4.9 trillion in revenue the federal government collected in fiscal 2022 came from individual income taxes. Americans pay an average of more than $10,000 to the U.S. Treasury Department every year – not a trivial amount – and many pay far more. But, as anyone who has ever filled out IRS Form 1040, bought a house, or even shopped for groceries knows, federal income tax represents only a portion of an annual tax bill.
In addition to the U.S. Congress, state and local governments also have the authority to levy taxes – and in one way or another, all of them do. However, exactly what they choose to tax, and by how much, varies considerably from place to place.
Using data from the Tax Foundation, an independent non-profit tax policy research organization, 24/7 Wall St. identified the states where people pay the most state and local taxes. Figures in this story do not include federal taxes.
It is important to note that local tax rates – particularly property and sales taxes – can vary within a state. But based on local averages, combined with taxes levied at the state level, Americans pay anywhere from about $2,900 to over $12,000 in state and local taxes every year, depending on the state.
In nearly half of all states – 24 out of 50 – the largest share of state and local tax revenue comes from property taxes. Property taxes are typically paid as a percentage of the value of assets like land, houses, and even cars or boats in some circumstances. In many of the states where people pay the most in taxes, effective property tax rates are higher than the national average of 1.1%. (Here is a look at the most and least tax friendly states for business.)
Click here to see the states where Americans are paying the most taxes to their state and local governments.
Click here for a detailed methodology.
While most states levy a personal income tax, there are those that do not, and in those places, the overall tax bill tends to be lower than average. Each of the seven states with no individual income tax makes up for lost revenue in other areas. Florida, for instance, benefits from sales tax revenue through its tourism industry. Alaska, levies taxes on resource extraction, specifically oil and gas. All but one of the seven states with no income tax rank in the bottom half of the 50 states by per capita tax burden. (Here is a look at the most tax friendly states for the rich.)
Because taxes are levied as a percentage of income, spending, or asset value, the states where people pay the most taxes tend to have higher-earning populations. Each of the five states with the highest average state and local tax bill are also the five states with the highest income per capita.
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