Everyone can relate to our daily costs becoming unaffordable, so there has been a huge surge in Americans fleeing high-tax states. The higher they are, the less disposable income we have, so keep in mind the following 17 states people no longer want to live in due to high taxes.
New York
According to the Tax Foundation, New York has the highest tax rates of all US states. New Yorkers have a 15.9% tax burden, and finances are further hindered by it being one of the most expensive cities in the world. To live in New York is taking on huge financial pressure!
Connecticut
Connecticut closely follows New York, with an average state tax burden of 15.4%. Income tax alone has a top rate of 6.99%, which is much cheaper than New York’s 10.9% top rate but higher than that of other neighboring states. Property taxes are also very high.
Hawaii
While the state of Hawaii offers a more peaceful way of life, residing on the islands also comes with a heavy tax burden. At 14.9%, Hawaii is one of the states with the highest tax rates and the highest income earners, who are particularly penalized.
Vermont
Vermont has a unique tax system in which the top 1% of income earners actually pay a lower tax rate than middle-class earners. Earning a middle-range income in the state, therefore, carries greater tax risk than a high income! That doesn’t seem fair to us.
California
Many Americans are leaving the state of California, as it has the highest income tax in the country. California’s highest income tax is a staggering 13.3%, while the federal tax is up to 37%. Taxes massively eat into Californians’ budgets.
New Jersey
Taxes in Jersey are high in all areas. From income tax and federal tax to sales and gas taxes, each tax is amongst the highest in the country. New Jersey also has the highest property taxes of any US state, with CNBC stating that it has an average of 2.23%.
Illinois
High taxes in Illinois pose a significant financial burden on residents. Property taxes, income taxes, and sales taxes are all notably high in the state, and Illinois is no longer an affordable state to live in when it comes to taxes. In Chicago alone, the sales tax is an insane 10.25%.
Virginia
While Virginia has one of the lowest sales taxes in the US, other taxes are exceptionally high. Under the state’s income tax system, the top bracket tax rate starts at a salary of just $17,000. This tax system is severely outdated and has remained at this figure since 1990.
Maine
Maine’s tax burden is 10.74% of personal income, making it an expensive place to live. Furthermore, if you’re looking to retire in Maine, you may want to rethink that decision; in addition to above-average property and estate taxes, the state also has a tax rate of up to 7.15% on retirement income.
Oregon
Oregon has one of the highest income tax rates in the country, at 9.9% for income earners over $125,000. It also has one of the most regressive income tax systems, as lower-income earners pay a larger share of their income than higher earners. No thanks!
Minnesota
Sadly, Minnesota has one of the poorest tax systems in the US. Its taxes are significantly higher than those of its surrounding states, and as reported by Twin Cities Business, there has been a spike in high-income filers leaving the state since 2020.
District of Columbia
If you earn over $1 million in the District of Columbia, you are taxed 10.75% on your income, and millionaires are fleeing. It no longer makes sense for high-income residents to remain in the district, especially considering that the federal tax is also the highest of the US states.
Iowa
Taxes in Iowa are pretty high, with the average Iowan paying over half a million in taxes in their lifetime. With a statewide property tax of 1.5%, Iowa’s property tax is much higher than the state average. It’s also one of the few states that has an inheritance tax.
Wisconsin
The state of Wisconsin has one of the highest residential property taxes in America, which significantly increases living costs. The state has four income brackets, and most people are taxed at the second-highest rate. Sales tax is 5%, which increases to 7.9% in Milwaukee. Ouch.
Nebraska
Nebraska is a state where everyone can agree the tax system needs a big overhaul. It has slowly become a high tax state, ranking in the middle around 1984 but now ranking 13th for the tax burden. Property taxes in Nebraska are particularly high, hovering around 1.65%.
Rhode Island
Newport Buzz claims that Rhode Island has the 10th highest tax burden in the US. The state sales tax is one of the highest, at 7%, and the state also taxes its 20% lowest income earners at much higher rates, making it a struggle for low-income residents to live here.
Massachusetts
Finally, Massachusetts’ state income tax has a flat rate income tax of 5%, regardless of income! Although this is extremely beneficial to high-income earners, those with investments may not see the benefits. Furthermore, while many states tax capital gains at the same rate as regular income, capital gains tax increases in Massachusetts to 8.5%. Yikes.
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