Residents in this state pay the most in income tax

This post was originally published on this site

Start spreading the news: New Yorkers are coughing up the most cash in state income taxes.

The Empire State collected $2,249 per capita in individual income taxes during the 2017 fiscal year, according to data from the Tax Foundation.

Connecticut was second, with $2,218 in individual income taxes per capita. Massachusetts came in third with $2,146 per capita.

In all, seven states don’t tax individual income: Alaska, Florida, Nevada, South Dakota, Texas, Washington state and Wyoming.

Meanwhile, Tennessee and New Hampshire don’t tax wages, but they both tax income from interest and dividends.

See below for a map of where your state ranks with respect to income tax, according to data from the Tax Foundation.

Income taxes make a significant contribution to states’ coffers. Nearly 40 percent of state tax collections come from levies on your wages, according to the Tax Foundation.

If you’re thinking of fleeing to a place with a lower or no income tax, remember that states need to get their revenue from somewhere.

“There are other taxes that matter, including sales and property taxes,” said Katherine Loughead, policy analyst at the Tax Foundation.

“The state estate tax can factor in for a lot of people as to whether they’ll be taxed at high rates if they pass their estate along to their heirs,” she said.

Here’s an example: New Hampshire won’t levy your wages, yet the Granite State imposes some of the highest state and local property taxes per capita — $3,115, the Tax Foundation found.

Further, some localities have their own income levies. This means that, while the state you move to matters, so does the city or town in which you work or reside.

“Local taxes can really depend on whether you live in an urban environment versus rural,” said Loughead.

More from Personal Finance:
Where to draw the line when getting your kid into college
Michael Avenatti allegedly made this tax slip-up
Why millennials aren’t buying homes

Subscribe to CNBC on YouTube.

Add Comment