Hawaiians pay more of their income toward state taxes than any other state.SCStock/Shutterstock
- A WalletHub study reveals state tax rates vary greatly across the U.S.
- Hawai'i has the highest middle-class tax burden while Alaska has the lowest.
The amount of taxes you pay is strongly influenced by where you live, and some states are collecting more of your income than others.
A study from personal finance company WalletHub, which was published in February, examined the tax burden for people in different income brackets for all 50 states and DC. The 10 states with the harshest taxes on the middle class come from all areas of the country and have an even mixture of red and blue political leanings.
To determine the tax burden, WalletHub looked at the percentage of a resident's income in each state that goes to sales and excise taxes, property taxes, and income taxes. It also looked at the amount of taxes paid at three different income levels, with $25,000 defined as "low," $50,000 for "medium," and $150,000 as "high."
Hawai'i was ranked as the worst state for middle-income earners, with 13.62% of earnings going to state taxes. Meanwhile, Alaska had the lowest tax rate for the middle class, with 4.98% of income paid in taxes.
New York and Illinois — home to two of the three largest cities in the US by population — came in second and third for highest tax burdens. Middle-income New Yorkers pay 12.58% of their income toward state taxes, and residents of Illinois pay 12.57%.
Alternatively, there are nine states with no state income tax. However, some of those states still have a heavy tax burden in other forms.
For example, Tennessee (ranked No. 24), Texas (No. 21), and Washington (No. 5) are in the top half in terms of the highest tax burden despite not having a state income tax. Washington ranks so high in tax burden due to its sales and excise tax rates, as middle-income earners pay 8.72% of their income to taxes, the highest rate in the country.
However, some states without income taxes give middle-class residents a break: Alaska (rank No. 50), New Hampshire (49), Wyoming (47), South Dakota (42), Nevada (40), and Florida (36) are all among the 15 states with the lowest amount of income going to state taxes.
Here are the 10 states where middle-income residents pay the highest percentage of their income on state taxes.