How Do Your State Tax Rates Compare?
Federal income tax rates attract a great deal of attention. This is to be expected because our federal income taxes are the largest tax bill most of us will pay. However, state taxes are also significant and they come in multiple forms. How much will the average American pay in state levies? Which state extracts the most from its residents?
A study by financial technology company Self gives us some perspective. It found that on average, Americans will pay $525,037 over their lives in taxes to their state of residence. This total includes taxes on income, property, vehicles and retail spending. However, this burden varies greatly by state with the highest average assessments as follows:
- New Jersey—$931,698
- Washington, D.C.—$789,934
- New Hampshire—$778,837
- Rhode Island—$766,521
- New York—$734,563
The bottom of the list has West Virginia with the average taxpayer paying $321,000. It is important to note that these rankings are based on dollars paid which of course, will most likely be higher in states with higher average incomes. Further, the cost of living and especially housing costs, can vary greatly by state. Just the same, one has to wonder how the residents of New Jersey find enough dollars to cover all of their essential expenses.
If you would like to learn more about these and other wise financial planning moves, please contact us through our Level 5 Financial LLC website or via phone at 719-323-1240. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.