The tax burden of Americans is made up of federal, state and local taxes. It includes the federal income tax, which is applied to income from various sources with a progressive scale. State income taxes vary by state. In addition, there are property taxes, calculated according to the value of real estate, and a sales tax in many states. There are also special taxes, such as the federal gasoline tax. These taxes are extremely important to funding public services and government programs at all levels of government in the United States.
But not all Americans, in the different states or territories, pay the same amount of taxes, as we have suspected for years and according to a recent published analysis. This report details and ranks the states by lifetime tax costs, if you live in the Northeast this may be of interest to you.
The US State With the Highest Taxes in 2024
Residents of New Jersey pay $987,117 in taxes over their lifetime, making it the highest in the country. Washington DC follows in second place with a tax burden of $884,820 over a lifetime.
Connecticut and Massachusetts rank third and fourth, with tax burdens of $855,307 and $816,800, respectively. And being West Virginia, the state with the lowest lifetime cost, by three hundred and fifty-eight thousand four hundred and seven dollars.
According to the report of the personal finance site Self Financial, based on the information collected in the first two months of this year, consider taxes on, income, housing, cars, clothing, food, beverages, entertainment and personal care. Based on fiscal data and various research sources, including the American Community Survey, the Federal Consumer Spending Survey and Zillow.
The lifetime tax figure is five hundred twenty-four thousand six hundred twenty-five, it is about one third of the income contributed over the lifetime of an average American, which totals about one million five hundred thousand dollars.
Taxes are on most people’s minds, given the looming April 15th federal tax deadline, known as “Tax Day”.
Many Americans Are Migrating to Other States With Lower Taxes
Thanks to the changes brought to us by the pandemic, many Americans moved within states, since they do not have the tether of their offices due to the growth of telecommuting. The number of people who moved between states increased by seven million four hundred thousand, approximately in 2019, to eight million two hundred thousand in 2022, according to census data.
New Jersey is the state with the highest taxes in the country, according to the Self Financial report, they lost the most residents compared to other states in 2023, accompanied by California, Illinois, Kansas, Massachusetts and New York) according to United Van Lines’ annual National Moving Study.
Americans have been moving to low-tax states in 2023, including Alabama, Arkansas, New Mexico, North and South Carolina, South Dakota and West Virginia.
The Nine States With Lower Taxes
The most noticeable feature about low-tax states is that they are exempt from income tax.
These nine states do not have them Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
However, not all of those states are low-tax destinations, according to Self Financial’s analysis. For example, the state of Washington, has relatively high sales and property taxes, as well as one of the highest wealth taxes in the country. Now, those taxes translate into better quality of like: you can find better education programs in these states, as well as better roads and health care. Even the jobs are better paying. These are things that the lower taxed states lack.
