It’s no secret that many middle-class families are struggling. Higher grocery expenses and housing costs are major factors, but high tax burdens can make matters worse. If you live in one of the least tax-friendly states for middle-class families, you probably know this too well.
Least tax-friendly states for the middle-class
Median salaries can differ greatly from state to state, so to determine which states have the highest tax burden for households with middle incomes, we considered each state’s median annual salary. Then, we calculated the average annual tax spent for three main tax categories: state income tax, property taxes, and sales taxes on essential items (groceries, diapers, and gas).
- We didn’t consider sales tax for states that don't tax essentials at the state level.
- It is important to note that local sales taxes may apply.
- (See below for full details about the methodology Kiplinger used to rank the states for this story.)
The states with the highest percentage of income spent on state taxes made our list. And here they are.
Median annual household income: $104,828
Percent of income spent on taxes: 11%
The median income in Massachusetts reaches nearly $105,000, and the Commonwealth doesn’t impose sales taxes on essential items like diapers and groceries. However, with the median property tax bill exceeding $6,000 and average state income taxes reaching almost as high, middle-class families in the Bay State spend more than 10% of their income on state taxes.
- Average income tax: $5,322.60
- Median annual property taxes: $6,080
- Average sales tax for essentials: $128.56
- Total annual amount spent on taxes: $11,531.16
Median annual household income: $83,504
Percent of income spent on taxes: 11.27%
Rhode Island might be a small state, but middle-class families in the Ocean State can experience big tax bills. Between state income taxes and property tax bills, the average middle-class household spends more than $9,100 on state taxes. And given the median income of just about $83,500, middle-class families in Rhode Island face the 9th highest tax burden in the U.S.
- Average income tax: $4,252.92
- Median annual property taxes: $4,886
- Average sales tax for essentials: $268.04
- Total annual amount spent on taxes: $9,406.96
Related: New ‘Taylor Swift Tax’ on Rhode Island Homes: Is Your Home Next?
Median annual household income: $109,707
Percent of income spent on taxes: 11.38%
Washington, D.C., is technically not a state, but part of the territory of the District of Columbia. Still, D.C.'s sales tax rate isn't bad at only 6% (compared to other places on this list). However, the nation's capital is considered one of the least tax-friendly places for middle-class families, largely due to its higher median income tax bill compared to some other places listed here.
- Average income tax: $7,725.12
- Median annual property taxes: $4,594
- Average sales tax for essentials: $165.20
- Total annual amount spent on taxes: $12,484.32
Related: Emergency Tax Bill Ends $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.
Median annual household income: $102,905
Percent of income spent on taxes: 11.77%
The median income in Maryland is high compared to most other states, but state income taxes are high, too. For this reason, the Old Line State earns its place as the 7th least tax-friendly for middle-class families.
- Average income tax: $7,756.56
- Median annual property taxes: $4,144
- Average sales tax for essentials: $216.22
- Total annual amount spent on taxes: $12,116.78
Median annual household income: $83,211
Percent of income spent on taxes: 12.10%
While Illinois is a state that doesn’t tax retirement income, you’re out of luck if you’re still working. Average income taxes for the middle class reach over $4,000, and property bills in the Prairie State are on the high end, too. To make matters worse, Illinois taxes diapers and is one of only 10 states that still taxes groceries.
- Average income tax: $4,119
- Median annual property taxes: $5,399
- Average sales tax for essentials: $547.21
- Total annual amount spent on taxes: $10,065.21
Median annual household income: $100,149
Percent of income spent on taxes: 12.71%
The Golden State lands at number 5 for the least tax-friendly, with middle-class families spending nearly 13% of their income on state taxes. It’s important to note that although the median property tax bill in California is just under $5,400, property tax burdens can vary greatly within the state. For example, property taxes might not reach $2,000 in the cheapest places in California. However, homeowners in other areas of the state could pay more than $9,000 per year.
- Average income tax: $7,076.88
- Median annual property taxes: $5,369
- Average sales tax for essentials: $286.42
- Total annual amount spent on taxes: $12,732.30
Median annual household income: $85,820
Percent of income spent on taxes: 13.02%
New York is often thought of as a high-taxed state, and this proves true for the middle class. On average, middle-class families in the Empire State spend over 13% of their annual income on state taxes, despite the state not taxing items like diapers and groceries. Families in New York City might pay even more in taxes since the city imposes its own income tax.
- Average income tax: $4,512.84
- Median annual property taxes: $6,542
- Average sales tax for essentials: $116.39
- Total annual amount spent on taxes: $11,171.23
Related: Ten Cheapest Places To Live in New York
Median annual household income: $85,220
Percent of income spent on taxes: 13.51%
Oregon technically doesn’t impose a state sales tax. However, you'll still pay a gas tax of 40 cents per gallon, which is relatively expensive compared to some other places on this list. Plus, middle-class families in the Beaver State pay almost $7,500 per year in income taxes. Even so, low property taxes (compared to other states listed) and no taxes on groceries or diapers place Oregon on this list at number 3.
- Average income tax: $7,434.84
- Median annual property taxes: $3,895
- Average sales tax for essentials: $187.20
- Total annual amount spent on taxes: $11,517.04
Median annual household income: $96,049
Percent of income spent on taxes: 14.46%
Middle-class families in Connecticut spend more than 14% of their income on state taxes. While this is mostly due to high property tax bills, state income taxes in the Constitution State are higher than in most other states, too. And although Connecticut doesn’t tax items like groceries and diapers, it still earns its place as the second least tax-friendly state for the middle class.
- Average income tax: $7,194.12
- Median annual property taxes: $6,573
- Average sales tax for essentials: $117
- Total annual amount spent on taxes: $13,884.12
Median annual household income: $104,294
Percent of income spent on taxes: 15%
Middle-class families in New Jersey face high tax burdens, mostly due to extremely high property taxes. The average property tax bill is a whopping $9,358, and the median income tax bill is over $6,000. For these reasons, the Garden State is the least tax-friendly state for middle-class families.
- Average income tax: $6,007.92
- Median annual property taxes: $9,358
- Average sales tax for essentials: $281.65
- Total annual amount spent on taxes: $15,647.57
Related: What's Going on With New Jersey Property Tax Programs?
Median annual household salaries for each state were collected from the latest U.S. Census Bureau data (the most recent 1-year estimate data available).
Personal income taxes were calculated using an ADP salary calculator. We used monthly pay periods and opted not to factor in extra withholdings or allowances. Income taxes paid vary from filer to filer and can depend on your income, filing status, and the number of credits and deductions you qualify for when filing your taxes.
Total average grocery costs were calculated from data reported by the World Population Review.
The average monthly diaper expense is based on estimates from the National Diaper Bank Network. State gas tax rates were used to calculate the average gas tax paid per family in a year.
We used sales tax rates (average combined local and state sales tax rates) provided by the Tax Foundation to calculate the average sales taxes spent on essential items. Tax spent on essential items may be higher than $0 in some localities, even if essentials aren't taxed at the state level.
The data for median annual property taxes paid is based on data provided by the U.S. Census Bureau.
Average taxes spent were added for each state to find the total percentage of household income paid to state taxes. Dollar amounts were rounded to the nearest cent. Percentages are rounded to the nearest tenth of a percent.
To determine what “middle income” means, the median household income for each state was used. However, the definition of “middle-income” can vary greatly. For purposes of this ranking, “family” means any household with at least one adult still raising at least one child. The amount of taxes paid can vary depending on several factors, including family size and the number of adults in the household who work.
