Residents in the U.S. are subject to vastly different tax liabilities depending on where they live. And for high earners, these variations can add up to tens of thousands of dollars in savings—or additional costs—on an annual basis.
Researchers calculated the total amount of state and local taxes paid by high-income filers (households earning more than $200,000) divided by the total number of high-income filers. These taxes include income, sales, real estate, and personal property taxes. Locations were then ranked accordingly.
These are the key takeaways from the report:
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Many factors—particularly inflation and real estate values—have made the cost of living in high-tax states even more expensive.
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New York, California, and Connecticut demand some of the highest costs of living, and ranked 1st, 2nd, and 3rd in this analysis—showing the highest state and local tax burdens for their residents overall.
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Higher earners in these locations have been burdened further due to new limits on state and local tax deductions.
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Unsurprisingly, metros in New York, California, and other coastal states like Connecticut and New Jersey lead the nation in taxes paid for high-income households as well. Ten of the top 12 metros are found in California alone.
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High earners pay far less in cities in Florida, Texas, and select other states, likely in part due to those states’ lack of personal income tax.
Georgia:
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Households earning over $200,000 per year in Georgia earn an average $495,672 annually.
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These high-earning households in Georgia pay an average of $18,360 per year in taxes, representing 3.7% of the average high-earning household income.
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Overall, high-earning households in Georgia pay less in state and local taxes than the national average ($23,211).
The annual tax filing season began again in late January, and over the next few months, tax burdens will be top of mind for many Americans as they prepare their 2023…
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