BALTIMORE, MD—With the tax deadline for most Americans fast approaching and low- and middle-income families expected to pay higher effective tax rates than the wealthy, the personal-finance website WalletHub this week released its report on the Best States to Be Rich or Poor from a Tax Perspective to help people find the states that will save them the most money on taxes.
Maryland was ranked as the 5th-worst state in which to be rich, according to the study.
In order to identify the states where people in different income brackets spend the most and least on taxes, WalletHub calculated the share of a resident’s income that they contribute toward sales and excise taxes, property taxes and income taxes.
Tax Burden in Maryland (1=Best, 25 =Avg.):
- 25th – Low-Income Earners (10.08% of Income)
- 33rd – Middle-Income Earners (10.03% of Income)
- 46th – High-Income Earners (11.53% of Income)
“The wealthy and less fortunate are both subject to taxes, but unfortunately people who are not as well off can end up getting hit harder due to the regressive nature of many taxes,” says Cassandra Happe, WalletHub Analyst. “Living in a state where your income bracket isn’t squeezed as hard during tax season can save you a lot of money. A few states even cut costs dramatically by not charging income tax altogether.”
“Illinois residents with low incomes pay the greatest percentage of their income in taxes, at nearly 14%, while people in Alaska pay around half that, at nearly 7%,” Happe added. “On the other end of the spectrum, high earners pay over 13% of their income in taxes in New York, but less than 4% in Alaska. WalletHub’s study based these calculations on an income of $25,000 for low earners and $150,000 for high earners.”
The full report can be viewed online here at WalletHub.
Photo via Pixabay
