Living in New York can be exciting, but it also comes with a heavy price. A new study from WalletHub shows that New York residents pay more of their income in state and local taxes than anywhere else in the country. Let’s take a closer look at why New Yorkers pay so much, how it compares to other states, and what it means for people living there.
What Is a Tax Burden?
A tax burden is the percentage of your income that you pay in taxes to your state and local governments.
It’s different from just looking at tax rates because it shows how much of your actual earnings go toward taxes — giving a clearer picture of the real cost of living in a state.
New York’s High Tax Burden Explained
According to WalletHub, New York’s total tax burden is 12.02% of income. Here’s the breakdown:
- Income taxes: 4.63%
- Property taxes: 4.36%
- Sales and excise taxes: 3.03%
This means if you earn $1,000, about $120 of it goes to taxes.
Hawaii comes second, where people lose about 11.8% of their income to taxes.
Why Are New York’s Taxes So High?
Several reasons explain why New York tops the list:
- Public Services: New York offers many public services like public transportation, education, and healthcare, which need funding.
- High Cost of Living: Places like New York City have very expensive property values, leading to higher property taxes.
- People Leaving: Many people are moving out of New York. As the population shrinks, fewer people are left to cover the state’s expenses, pushing taxes even higher for those who stay.
How It Affects New Yorkers
A high tax burden can be frustrating. It means less take-home pay, making it harder for many people to save money, buy homes, or afford daily expenses.
However, those taxes also help pay for services that many New Yorkers use every day — like buses, public schools, and hospitals.
States With the Highest Tax Burdens
Here are the top 10 states where residents pay the biggest share of their income in taxes:
- New York: 12.02%
- Hawaii: 11.80%
- Vermont: 11.12%
- Maine: 10.74%
- California: 10.40%
- Connecticut: 10.08%
- Minnesota: 9.95%
- Illinois: 9.67%
- New Jersey: 9.47%
- Rhode Island: 9.38%
States With the Lowest Tax Burdens
If keeping more of your paycheck sounds better, here are the top 10 states with the smallest tax burdens:
- Alaska: 4.93%
- New Hampshire: 5.63%
- Wyoming: 5.70%
- Florida: 6.05%
- Tennessee: 6.07%
- Delaware: 6.43%
- South Dakota: 6.44%
- North Dakota: 6.80%
- Oklahoma: 7.04%
- Nevada: 7.37%
Fun Facts About New York
Even though taxes are high, New York is full of strange and interesting facts:
- Weird Laws: Did you know it’s illegal to walk around on Sundays with an ice cream cone in your pocket in New York?
- NYC Surprises: New York City has more people than 40 entire states combined!
From crazy laws to amazing history, New York is never boring.
New Yorkers may pay the most taxes in the country, but they also get access to services, entertainment, and opportunities that are hard to find anywhere else.
Still, it’s important to understand where your money is going — and whether living in New York is worth it for you. If you’re looking for a lower tax burden, other states might offer a lighter load. Wherever you choose to live, knowing how tax burden impacts your wallet can help you plan better for your future.
