10 Cities With the Highest Tax Rates
The brief moment of joy we all feel when our paychecks hit is often quickly undercut by the reality of how much is taken out in taxes. While some taxes show up in our paychecks, others like auto and property tax may take the form of extra payments you have to make, reducing the amount of income you get to put away each month.
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Taxes also vary widely across the U.S. Here, using 2021-2022 data from Cheapism and the Tax Foundation, we look at the 10 cities with the highest tax rates. Is yours one of them?
10. Wilmington, Delaware
Delaware may seem financially friendly, since it doesn’t have sales tax, but the city of Wilmington makes up for that absence with a steep 13.5% tax rate for households that earn $150,000 or more. According to Cheapism, this high rate is linked to higher home values.
9. Detroit, Michigan
Michigan seems like a state that would be friendly to the working class, tax-wise. Unfortunately, the state’s flat income tax rate structure puts an undue burden on lower-income individuals and families, particularly in Detroit.
Here, taxpayers who earn as little as $25,000 pay a tax rate of nearly 13.7%, which is higher than what high-earning folks pay in other cities.
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8. Louisville, Kentucky
Louisville is not only known for the Kentucky Derby, bourbon and baseball. Like other cities with a flat income tax structure (which simply means that you pay the same rate regardless of income earned), city residents earning over $150,000 are paying a steep 13.7%.
Louisville also rates high on property taxes, taking a chunk out of ordinary Americans’ paychecks.
7. Portland, Maine
Maine’s Portland takes into consideration a graduated tax system depending upon income. However, in part thanks to a new home assessment process in 2021, those whose homes were valued by 77% more than before would pay a commensurate amount of taxes on that value.
Also, those earning higher incomes pay a steep 15% in taxes, according to Cheapism.
6. Providence, Rhode Island
In general, Rhode Island goes hard on taxes, though income tax is on a graduated scale. There’s a 7% corporate income tax and a 7% state sales tax, according to the Tax Foundation.
The city of Providence also has high taxes and fees for cars. For households that earn $150,000 or more, they’ll see a 15.4% bite taken out in taxes alone.
5. Columbus, Ohio
Columbus at least takes into account that not everyone should pay the same amount of taxes, depending upon how much they earn. So while those earning lower incomes in Columbus do pay less, their higher-earning peers are not so lucky.
In addition to income taxes, corporate taxes include a gross receipts tax, according to the Tax Foundation, along with a 5.75% state sales tax and a local sales tax rate of 2.25%.
4. Baltimore, Maryland
Baltimore is tough on higher-earning taxpayers than it is on lower-earning ones. Those who earn $150,000 or more pay about 16.5%. They also pay a 6% state sales tax, and an 8.25% corporate income tax rate, according to the Tax Foundation.
3. Milwaukee, Wisconsin
Wisconsin state law gives it an unusual ability to set all the income and sales tax for all the cities, redistributing money to city and county governments through a revenue-sharing program.
As such, Milwaukee makes up for its smaller share of taxes with exorbitant property taxes, which are among the highest in the country. Overall, families earning higher incomes and owning property pay around a 17.5% tax rate.
2. Philadelphia, Pennsylvania
Philadelphia has some of the highest wage taxes in the entire country. For example, according to the Pew Research Foundation, city residents who make $100 an hour will receive the same wage tax rate of nearly 3.9% as someone making the state’s $7.25 minimum wage.
Additionally, an office building that is valued at $50 million will be taxed at the same approximately 1.4% as a home valued at $50,000. The commonwealth of Pennsylvania imposes a 3.07% state income tax that is heavier for lower-income families. In overall taxes, households where the earnings are $100,000 or more will see a major tax chunk of 20.9%, according to Cheapism.
1. Bridgeport, Connecticut
It’s no real surprise that one of the wealthiest cities in the U.S. also imposes some of the highest taxes. In Bridgeport, as of 2022, approximately 20% of families that live here report income of $200,000 or more. When you factor in property and car taxes, Bridgeport residents who earn $150,000 or more are paying as much as 22% in taxes.
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