These Are America's Most And Least "Taxing" States (And Everything Inbetween)

One of the most consistent debates emanating out of Washington in the past 6 years has been that dealing with income tax. Whether high, low, "fair" or "unfair", said discussions, however, focus solely on tax paid at the Federal level, and largely ignore that "other" key tax: state. Which is surprising, considering some states such as California demand a total contribution amounting to a third of the highest marginal Federal tax bracket, which could make some wonder if those bracing sea breezes are really worth it. But what about the other states? Here is the full breakdown of the states with the top income tax rates, those with the lowest, and all the states inbetween.

As Bloomberg reports citing Tax Foundation data, as of Jan. 1, nine states don't levy income tax on wages, and eight have a flat tax. Brackets in which taxes kick in differ by state, as do exemptions.

Here are the highest "taxing" states in the US:
California 13.3%
Hawaii 11%
Oregon 9.9% (a, b)
Minnesota 9.85%
Iowa 8.98% (b)
New Jersey 8.97% (a)
Vermont 8.95% (tie)
Washington, D.C. 8.95% (tie)
New York 8.82% (a, c)
Maine 7.95%

a) Local income taxes are excluded.
b) Allows "some or all federal income tax paid to be deducted from state taxable income," according to the Tax Foundation.
c) The Tax Foundation notes that New York has "'tax benefit recapture, by which many high-income taxpayers pay their top tax rate on all income, not just on amounts above the bracket threshold.”

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