Paying taxes ensures your state and country continually delivers services to its people. However, paying taxes is an emotive subject, especially when people feel their money isn’t used to their benefit. That said, every state in America has different tax brackets which means that some pay higher than others. In this article, we’ll use data from the Tax Foundation to reveal the states with high taxes.
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States with high taxes
When we talk about States with high taxes, we are evaluating local sales and state taxes combined. Sales taxes are those imposed on goods and services while state taxes are imposed on an individual’s income.
Louisiana – 9.56%
Louisiana state and sales tax is the highest in the United States because it relies on sales tax to finance its operations. Its taxes on property and wealthy companies remain low so it has to make up the difference by driving high sales taxes. This means that people spend more on goods and services which isn’t sustainable for most people.
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Tennessee – 9.55%
People living in Tennessee don’t pay income tax. However, corporations remit a 6.5% corporate income tax. Further, residents pay 7% in state sales tax. The state relies on regressive sales taxes meaning that low-income earners pay more than high-income earners.
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Arkansas – 9.45%
Arkansas imposed a state-individual income tax of between 2% and 4%. Its corporate income tax ranges between 1% to 4.8%. Additionally, they pay about 6.50% in state sales tax. Like Tennessee relies on regressive taxes, meaning more middle and lower-income individuals pay more than high-income people.
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Washington – 9.38%
Washington is a tax-friendly state for income earners because they don’t impose taxes. However, it has the fourth-highest sales tax in the country because it depends on sales tax to manage its affairs. Further, corporations are shielded from taxes, while many view the state’s tax structure as unfair because it shields the wealthy from paying taxes. At the same time, the poor are bearing this burden.
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Alabama – 9.29%
Like the other states, Alabama relies heavily on sales tax to raise money for public services. According to the Institute on Taxation and Economic Policy, low-income earners pay twice more in taxes compared to high-income earners, which many view as unfair. That said, some of its taxes are the lowest including property taxes.
In Conclusion
These are the states with high taxes in sales and state taxes in the United States. While some might offer lower rates in different tax categories, you have to analyse each by merit to decide if it’s favourable for you. Also, we hope you understand why these states with high taxes collect more from their residents.
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