People in These 4 States Will Pay the Most Taxes in Their Lifetime

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The state a person calls home can have a major influence on how much they pay in taxes over their lifetime. On average, Americans will contribute about a quarter of their total earnings to taxes. However, this figure isn’t set in stone: Tax rates vary widely from state to state.

With each state offering its own set of tax rules and policies, understanding the full picture can be complicated. For many, the amount they pay in taxes could change dramatically depending on where they live, making it important to know which states have the heaviest tax burdens.

A February 2024 report from Dancingnumbers reveals how dramatically taxes can vary between states, highlighting the significant impact a person’s location can have on their lifetime tax burden. In fact, some states take a much bigger bite than others!

High-Tax States

• New Jersey: Well known for its property taxes and progressive income tax system, New Jersians face a high overall tax burden. The combo of these two tax systems impact resident’s finances considerably.
• California: California uses a progressive income tax system and has substantial property taxes in many areas, contributing to a major tax burden. Similar to New Jersey, the combination of income and property taxes can be a major expense, especially in coastal regions.
• Connecticut: Connecticut residents deal with high property taxes and a relatively high income tax, which together impact the overall tax liability. This makes Connecticut another state where taxes can be a significant consideration for individuals and families.
• New Hampshire: Although New Hampshire doesn’t have a state income tax, its steep property taxes create a dramatic tax burden for house owners. Sometimes the absence of one tax doesn’t mean a low overall burden.

Low-Tax States

• Texas: With no state income tax, Texans benefit from a lower overall tax burden. Since Texas has other taxes, and fees the overall picture can be more nuanced. 
• Florida: Like Texas, Florida has no state income tax, with a lower tax burden compared to many other states. This makes both Texas and Florida attractive to those seeking lower income tax obligations. However, sales taxes and other fees should be considered.
• Alabama: Alabama generally has lower property taxes than many other states, making homeownership potentially more affordable. This can be a significant advantage for those looking to buy property, especially families.
• Louisiana: Louisiana’s tax structure includes lower property taxes, but sales taxes can be a significant factor. While property taxes might be low, the reliance on sales tax can impact overall spending, particularly for lower-income individuals.
• Mississippi: Mississippi generally has low property taxes, but the state’s revenue structure relies on other forms of taxation. This is another example of how different tax categories can balance each other out and it’s important to look at the whole picture.
• Oregon: Oregon’s lack of a sales tax can be a significant benefit for residents, reducing the overall tax burden. This can lead to significant savings on everyday purchases, making Oregon attractive for budget-conscious individuals.
• Delaware: Like Oregon, Delaware has no sales tax, which can lead to considerable savings over time. The absence of sales tax in both these states can be a major draw for residents, especially those who make frequent purchases.

State-by-State Tax Showdown: How Key Tax Categories Stack Up Across the U.S.

• Income tax: States like New Jersey and California have progressive income tax systems, meaning higher earners pay a larger percentage. States like Texas and Florida have no state income tax. This illustrates the wide range of approaches states take to income taxation, a key factor in lifetime tax burden.
• Property tax: States like New Hampshire and Connecticut have high property taxes, while states like Alabama and Louisiana tend to have lower ones. This shows how property taxes, often used for local services, can vary drastically across the country.
• Car taxes: States like Kansas, California and Illinois have higher car-related costs due to sales taxes, registration fees and other charges. These costs contribute to the overall expense of vehicle ownership, which can be significant.
• Sales tax: States like Tennessee and Louisiana have higher sales tax rates, while states like Oregon and Delaware have no sales tax. This highlights the different ways states generate revenue and how it impacts consumers’ everyday spending.

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