When you move to a different city, you adopt a few things. A new neighborhood, sometimes a new culture, a new home sport’s team. One thing you also adopt is a new tax burden. Each state and city in the US has its own share of taxes to consider and not all are created equal. Here are the US cities with the highest taxes (and the lowest!)
Why City Taxes Vary
Simply put, states and cities have a pretty broad and unfettered ability to impose the taxes they see fit. This is why some states have no sales or income tax while others do. It’s also why property taxes may vary widely between states, cities, and even neighborhoods.
When looking at the cities with the highest taxes, it’s important to break down exactly what we’re talking about. Federal income tax rates do not changed based on where you live. However, state income tax, sales tax, property taxes, and excise taxes are set at the state or local level.
Why are cigarettes more expensive in New York City than West Virginia? Among other things, the tax rates are vastly different. For the same reason, a gallon of gas is cheaper in Michigan than it is in New York.
Cities With The Highest Taxes
When looking at the tax burden placed on the average citizen, the state of Connecticut emerges as the #1 state in the nation for high taxes. Connecticut residents are burdened with an average of $7,869 per year.
New York and New Jersey came in at #2 and #3 with average tax burdens of $6,993 and $6,926 respectively. Residents of these states, specifically the larger cities are faced with an average tax burden two to three thousand dollars more per year than the national average.
Note: The national average tax burden is $4,420 according to TurboTax.
Cities With the Lowest Taxes
It should come as no surprise that the southern states ranked better. Even city residents benefit from an average tax burden below the national average. The top states were:
- Mississippi: $2,742
- Tennessee: $2,805
- Louisiana: $2,950
Residents of these states have an average tax burden well below the national average.
Location, Location, Location
When it comes to real estate, location matters. If you’re trying to calculate taxes; it matters even more. City vs City is a powerful cost of living calculator that determines the true cost of living in your city.
We examine all major state and local taxes, housing and transportation expenses, income levels, and more. Thinking of moving to a different city? We use the same formula to calculate the expected cost of living in that city.
By examining costs at the zip-code level, City vs City is able to develop an accurate estimate at the real living costs in that area. We compare your chosen cities side by side to determine which city represents a better value.
If you’re thinking of moving, avoid those cities with the highest taxes! Instead, don’t make a move until you download the City vs City app first!