By Amanda Weiss
Finances play a far more significant role in our lives than we often want them to. Along with the expenses of buying the items we need, taxes are an unavoidable cost. There are taxes on everyday products, housing, property, and more. Depending on your geographic location, the amount you will owe in taxes can vary. Taxes, in particular, vary between different states. In many cases, areas that are very attractive in some respects have unreasonable taxes, and this can affect where you choose to live. Whether you are first looking to settle down or searching for a retirement spot, consideration of taxes is important. These, according to the Tax Foundation, are the 11 worst states in the US for high taxes.
1) New Jersey
The worst state to live in based on taxes alone is New Jersey. The amount of income tax you will pay as a New Jersey resident can vary widely. In fact, people pay anywhere between 1.4% and 8.97%. The sales tax applied to products and services is 7%. New Jersey is also known for its extremely high property taxes. On average, a homeowner pays $8,500 in a year as property tax. For all residents overall, the per capita yearly amount is almost $3,000. Property taxes are this high because the state is densely populated and these taxes pay for local government expenses. Additionally, public education in New Jersey is very expensive, and property tax funds pay for it. The high taxes in the state also contribute to the pension system, since it is consistently underfunded.
2) New York
New York is well known for its high taxes, especially in and surrounding New York City. As an individual resident, you can expect to have to deal with an income tax between 4% and 8.82%. If you are unable to get a job and must file for unemployment benefits, you will face an unemployment insurance tax ranging from 1.70% up to 9.50%. One of the most significant, and worst, taxes you will face as a New Yorker is property tax. Per capita, property tax is almost $2,500 annually. Per household, it averages around 13% of total income. In fact, some people choose to move away because they are unable to afford these taxes. They tend to run so high for several reasons. New York spends 85% more per student on public education than the national average. Tax caps have been put in place by government officials to avoid large percentage increases from year to year.
Among the highest-taxed states in the nation is California. Individual income tax has a huge range, depending on how much money you bring in. It starts as low as 1% and reaches over 13% as your income approaches or exceeds half million dollars per year. There are some state tax credits you may qualify for, but many federal deductions are not applied in California. Sales tax in this state is also high, at 7.50%. Property taxes also contribute to the high cost of living. Over the last year, the per capita property tax was $1,365. Unfortunately for tax payers, the homeowner and rental assistance program that reimbursed some of their property taxes is no longer in place. However, there is a cap such that these taxes cannot increase by more than 2% from year to year.