The Average American’s Tax Bill in the 20 Biggest US Cities

8 min Read

shalunts / Getty Images/iStockphoto

shalunts / Getty Images/iStockphoto

Taxes is rarely anyone’s favorite topic to think about, much less pay them. However, if you think taxes are high where you live, you might be surprised to find out that there are cities with much higher (or lower) taxes than yours. 

GOBankingRates used data from from the U.S. Census’ 2021 American Community Survey to determine the household median income for each of the 20 largest cities in the U.S. Additionally we looked at effective and marginal tax rates to determine the average American’s tax bill, including federal and state income taxes plus Federal Insurance Contributions Act (FICA) tax, a federal payroll tax.

Though it can feel like the government is taking a sizable chunk out of your paycheck, you might actually live in one of the most tax-favorable cities in America.

Washington, D.C.

  • Total tax bill: $23,303

One of only five cities on GOBankingRates’ list to be burdened with an average tax bill of over $20,000, District of Columbia residents get to enjoy a median income of $93,547. Federal income taxes amount to over half of the expected total tax bill for those living in D.C., at $12,841.

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Denver, Colorado

  • Total tax bill: $18,408

The Mile High City has an average tax bill that lives up to Denver’s nickname. Median household incomes top $78,177, which means state, federal and FICA taxes end up approaching $19,000 — or over 23% of income.

Seattle, Washington

  • Total tax bill: $23,509

Even though Seattle residents enjoy having no state income tax, residents still have a high overall tax liability. There’s a good reason for this, however — Seattle has the third-highest median income on this list at $105,391, resulting in high federal and FICA taxes.

Charlotte, North Carolina

  • Total tax bill: $14,567

The tax situation for Charlotte residents is about the same as that in Austin, Texas or Los Angeles. Median incomes of $68,367 result in $2,036 in state taxes as well as $14,567 in total income tax liability.

San Francisco, California

  • Total tax bill: $38,305

If you want to live in the city by the Bay, you’d better prepare to pay a significant portion of your salary in taxes. With a whopping $38,305 in total income taxes, San Francisco residents face over $8,291 in state taxes and an effective federal tax rate of 16.14%. The bright spot is that these taxes derive from a median income of $126,187 the highest of any city in the top 20. However, the San Francisco area is one of the worst offenders in terms of income inequality in the U.S.

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Indianapolis, Indiana

  • Total tax bill: $11,352

Among the 20 biggest U.S. cities, Indianapolis has the third-lowest effective federal tax rate, at just 8.54%. This is due to the low median income in the city of just $54,321.

Columbus, Ohio

  • Total tax bill: $12,006

Columbus residents don’t have particularly high incomes, but their overall tax liability is significant due to both state and local income taxes. The total marginal income tax rate of 35.51% is among the highest on the list.

Fort Worth, Texas

  • Total tax bill: $12,400

Fort Worth and Dallas might be considered twin cities, but Fort Worth residents are much better off, earning nearly $10,000 more than their Dallas neighbors on average. Although there aren’t any state or local income tax liabilities in either city, the higher Fort Worth salaries result in much larger overall tax bills.

Jacksonville, Florida

  • Total tax bill: $9,567

There aren’t any state or local income taxes in Jacksonville, keeping overall tax obligations low. In fact, Jacksonville is one of only 5 cities in the top 20 that has a total effective tax bill below $10,000.

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Austin, Texas

  • Total tax bill: $15,674

Austin is one of the fortunate cities in the top 20 that doesn’t have any state income taxes adding to the overall bill. However, Austin residents earn a decent amount of money: The median income of $78,965 results in high federal and FICA taxes.

San Jose, California

  • Total tax bill: $37,850

Silicon Valley gem San Jose has the second-highest overall tax bill among the largest cities in America — although it’s not much less in nearby San Francisco. At $125,075, the extraordinarily high median income on this list is the culprit, because high incomes trigger heavy state, federal and FICA taxes.

San Jose residents might need every penny of their padded paychecks — it’s one of the major cities that cost the most to live comfortably.

Dallas, Texas

  • Total tax bill: $9,561

Dallas residents have a median income of $58,231. However, having such a low income isn’t as rough when Dallas residents don’t have to pay any state or local income taxes.

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San Diego, California

  • Total tax bill: $23,650

With an annual median income of $89,457, residents in sunny San Diego enjoy both high salaries and great weather. However, they do have to pay the piper in terms of a combination of high state and federal income taxes, in addition to FICA taxes.

San Antonio, Texas

  • Total tax bill: $8,942

As residents of Texas, San Antonians don’t pay state or local income taxes. Coupled with a relatively low median income of $55,084, the tax situation for San Antonio residents is one of the lowest in the country.

Phoenix, Arizona

  • Total tax bill: $12,810

In the Sun Belt, Phoenix residents enjoy a median household income of $64,927. Arizona does levy state tax on its residents, bringing the total effective tax burden in Phoenix to 19.73% of income.

Philadelphia, Pennsylvania

  • Total tax bill: $12,146

Residents of Philadelphia might not feel the brotherly love that the city is named for when it comes paying their taxes. Although residents have the lowest average income of any city in the top 20, at just $52,649, its tax burden is quite high, amounting to 23.07% of income.

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Houston, Texas

  • Total tax bill: $9,125

Houston is another Texan city that benefits from low overall taxes due to the lack of state income tax liability and a low median household income, coming in at $56,019. The overall tax burden of just over $9,125 is among the lowest overall tax burdens of these 20 cities.

Chicago, Illinois

  • Total tax bill: $15,020

High state income taxes are responsible for pushing up Chicago’s effective tax burden over $15,000. A resident earning Chicago’s median income of $65,781 will face a significant $3,256 in state taxes.

Los Angeles, California

  • Total tax bill: $15,995

Los Angeles shares the same burden as most of the top 20 cities with the biggest tax bills: high state income taxes. Overall, California is one of the worst states for the middle class. Although residents in the City of Angels enjoy decent incomes, average state taxes of over $3,000 contribute to a high total tax rate.

New York

  • Total tax bill: $18,968

Although New York only has about half the annual tax bill of San Francisco, state taxes nearing 10% push the overall income tax burden in the city to 20.94% of income. Though it might come as a surprise, the median income in New York is not excessively high, at just $70,663.

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The Most and Least Tax-Friendly Cities in America

The most expensive cities in America, such as San Jose and San Francisco, levy annual tax bills nearly four times that of cities with lower taxes, such as Houston.

Although much of this tax discrepancy is due to higher median incomes, the worst cities also carry higher state tax rates. If you’re counting on a tax refund to cover some of your expenses, you might be better off living in a city with lower taxes.

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Jordan Rosenfeld contributed to the reporting of this article.

Methodology: In order to find the tax burden on the average American in the nation’s 20 largest cities, GOBankingRates first found the 20 largest cities in terms of (1) total population as well as the (2) median household income of these cities, sourced from the 2021 American Community Survey conducted by the US Census Bureau. With these 20 cities isolated, GOBankingRates used an in-house calculator and Tax Foundation’s 2023 tax data to find both the (3) effective and (4) marginal tax rate as well as (5) total spent on income taxes for the average American in each of the 20 largest cities. These calculations were done for a person filing their taxes as a single person and for a married couple filing jointly. To figure out the total tax burden, GOBankingRates combined total spent on federal and state income tax plus FICA. The standard deduction was used when calculating income tax rates at both the state and federal level. All data was collected on and up to date as of June 5, 2023.