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- Taxes can eat up a significant portion of your paycheck, but how much depends where you live.
- WalletHub recently analyzed US tax data and discovered the best states for people considered "high income."
- Considering state and local income taxes, property taxes, and sales taxes, WalletHub calculated the tax burden for a resident earning $150,000 — that is, the percentage of their income spent on taxes.
- New York fared the worst for high-income residents, while no income-tax states Alaska, Nevada, and Wyoming top the list of best states.
"The more you make, the more they take."
That’s a common criticism of our progressive tax system in the United States, but the Institute on Taxation & Economic Policy’s 2018 report found that the overall tax burden on a national level is actually higher for low-income families than it is for middle-income households and the top 1% of earners, meaning they pay more in taxes in relation to their income.
WalletHub used data from the Institute on Taxation & Economic Policy report to find out which states take the least amount of taxes from their high-income residents, calculated as a percent of income.
WalletHub found the overall tax burden — comprised of sales and excise taxes, property taxes, and income taxes — for a $150,000 annual income in every state. States where taxes make up the smallest share of income ranked highest.
New York fared the worst for high-income residents, while no income-tax states Alaska, Nevada, and Wyoming top the list of best states.
Below, check out the 25 best states to live for high earners and the total tax burden as a percent of income.
25. Georgia — 8.21%
24. Missouri — 8.15%
23. North Carolina — 8.07%
22. Indiana — 8.01%
21. Arizona — 8.00%
20. South Carolina — 7.94%
19. Utah — 7.93%
18. Michigan — 7.89%
17. Mississippi — 7.77%
16. Idaho — 7.64%
15. Louisiana — 7.60%
14. Colorado — 7.58%
13. Washington — 7.32%
12. Montana — 7.28%
11. Texas — 7.05%
10. Delaware — 6.88%
9. Alabama — 6.31%
8. North Dakota — 6.01%
7. New Hampshire — 5.87%
6. South Dakota — 5.76%
5. Florida — 5.45%
4. Tennessee — 5.11%
3. Wyoming — 5.03%
2. Nevada — 4.31%
1. Alaska — 3.01%
- Read more about US taxes:
- What people at every income level from $21,000 to $266,000 will have to pay in taxes this year
- The 27 US states where millionaires face the highest taxes
- Alexandria Ocasio-Cortez has a plan to tax the wealthiest Americans 60% to 70%, and it highlights a detail about taxes most people get wrong
- Experts say small tax refunds are a good thing, but a look at how Americans spend the cash explains why they don’t feel the same
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See Also:
- Homeowners in expensive US cities should be some of the first to notice how Trump’s tax reform affects this year’s filing
- You can get a 6-month extension on your tax return, but that doesn’t mean you’re off the hook on tax day
- A retirement account can reduce your tax bill, but the type you decide to use determines when
Source: Business Insider – tloudenback@businessinsider.com (Tanza Loudenback)