States with the highest income tax

Understanding states with the highest income tax

Across all 51 states and the District of Columbia, top income tax rate spans from 13.30% in California at the top of the list to 0.00% in Wyoming at the bottom. The three at the top are California, Hawaii, and New York; the three at the bottom are Texas, Washington, and Wyoming.

The states at the top of this list — California, Hawaii, New York, New Jersey, and Oregon among them — levy the highest top marginal income tax rates in the country. At the other end sit the states with no wage income tax at all. The rate shown is the top bracket, which applies only to income above a high threshold; most residents pay an effective rate well below it.

A high top rate is a signal about a state's tax philosophy, but it is not the whole tax bill. States that tax income heavily sometimes keep sales and property taxes lower, and vice versa. To judge the real burden you have to look at all three together, along with how much of your income would actually fall into the top bracket.

Income tax is separate from the cost of living: a state can be expensive to live in yet tax income modestly, or affordable yet tax it heavily. For high earners in particular, the income tax rate can outweigh a chunk of the cost-of-living difference between two states, which is why it belongs in any serious relocation comparison rather than as an afterthought.