Many Americans are concerned with how much of their hard-earned money goes to taxes. But did you know some states hit the middle and lower-income families harder than others? Here are the 21 states with the most regressive tax systems, where the tax burden is heavier on the working class.
#1. Washington
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1472876039.jpg)
Washington tops the list with no income tax, relying heavily on sales tax and excise taxes. Low-income families in Washington pay nearly 17% of their income in taxes, while the wealthiest pay just 3%.
#2. Texas
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1999140056.jpg)
Texas also has no state income tax, but high sales and property taxes. The bottom 20% of earners pay 13% of their income in taxes, compared to only 3% for the top 1%.
#3. Florida
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_19289491.jpg)
Florida’s lack of state income tax is offset by high sales and excise taxes. Low-income families pay about 12% of their income in taxes, while the wealthiest pay around 2%.
#4. South Dakota
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_327837104.jpg)
South Dakota doesn’t levy a state income tax, relying instead on sales and excise taxes. This results in the lowest-income residents paying over 11% of their income in taxes, while the top earners pay just under 2%.
#5. Tennessee
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_161158970.jpg)
While Tennessee has phased out its income tax, high sales taxes remain. The poorest residents pay around 10% of their income in taxes, while the wealthy pay less than 2%.
#6. Nevada
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_2295027557-1.jpg)
Nevada’s lack of state income tax is counterbalanced by substantial sales and gaming taxes. Low-income residents pay about 8% of their income in taxes, compared to 1% for the highest earners.
#7. Wyoming
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1803502915.jpg)
Wyoming’s absence of an income tax is made up for with high sales and excise taxes. This means the poorest residents pay 9% of their income in taxes, while the wealthiest pay less than 2%.
#8. Arizona
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1076915681.jpg)
Arizona relies heavily on sales taxes, with relatively low income taxes. The lowest-income families pay over 12% of their income in taxes, compared to 4% for the highest-income families.
#9. Louisiana
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_736058719.jpg)
Louisiana’s sales taxes are among the highest in the country at 9.52%. Combined with low income taxes, this leads to a regressive system where low-income families pay 10% of their income, while the wealthy pay around 4%.
#10. Alabama
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_696217879-1.jpg)
Alabama has high sales taxes and low income taxes, resulting in a regressive tax system. The poorest families pay 9.9% of their income in taxes, compared to 3.4% for the wealthiest.
#11. Arkansas
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1369928780.jpg)
Arkansas imposes high sales taxes, which hit lower-income families harder. The bottom 20% pay 12.1% of their income in taxes, while the top 1% pay just 6.2%.
#12. Mississippi
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_652117483-1.jpg)
Mississippi’s tax system relies heavily on sales taxes, affecting low-income residents more. The poorest families pay around 10.6% of their income in taxes, while the wealthiest pay only 4.2%.
#13. Indiana
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_756354304.jpg)
Indiana’s flat income tax and high sales taxes create a regressive tax environment. Lower-income families pay about 12% of their income in taxes, while the top earners pay 5%.
#14. Pennsylvania
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1805542537.jpg)
Pennsylvania’s flat income tax, coupled with high sales taxes, results in a regressive system. The bottom 20% of earners pay 12% of their income in taxes, compared to 4% for the top 1%.
#15. Ohio
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1981754348.jpg)
Ohio’s reliance on sales taxes and a relatively flat income tax structure creates a regressive system. Lower-income families pay 11.8% of their income in taxes, while the wealthiest pay 5.5%.
#16. Oklahoma
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1176466870.jpg)
Oklahoma’s high sales taxes contribute to its regressive tax system. The lowest-income residents pay 10.5% of their income in taxes, compared to 4.3% for the wealthiest.
#17. Utah
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1878586423.jpg)
Utah’s flat income tax and significant sales taxes result in a regressive tax system. The poorest families pay around 9% of their income in taxes, while the top earners pay 4.7%.
#18. New Mexico
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_777924193.jpg)
New Mexico relies heavily on sales taxes, which are regressive by nature. The lowest-income families pay 10.6% of their income in taxes, compared to 4.8% for the highest earners.
#19. Kansas
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1367268422.jpg)
Kansas has high sales taxes and low income taxes, leading to a regressive tax system. Lower-income families pay about 11.1% of their income in taxes, while the wealthy pay 4.5%.
#20. Georgia
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_209047129.jpg)
Georgia’s reliance on sales taxes makes its tax system regressive. The poorest residents pay around 10% of their income in taxes, while the top 1% pay just 5%.
#21. Kentucky
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_773796256.jpg)
Kentucky has a regressive tax system with high sales taxes and a flat income tax. The lowest-income families pay around 10% of their income in taxes, compared to 4% for the wealthiest.
Unfair Burden
![](https://libertyandwealth.com/wp-content/uploads/2024/05/shutterstock_1956867292.jpg)
These states demonstrate how tax structures can place an unfair burden on lower-income families. Understanding these regressive systems is crucial for advocating fairer tax policies. Knowing where your state stands can help you make more informed decisions and push for more equitable tax systems.
Budget Boss: 12 Tips for Managing Your Money Wisely
![](https://mamasaywhat.com/wp-content/uploads/2024/03/pexels-karolina-grabowska-4386179.jpg)
Embarking on a journey to master budgeting requires evidence-based strategies supported by research to manage your finances effectively and achieve your financial goals. Here are 12 research-backed tips, along with actionable steps to implement them, for mastering budgeting and maximizing your financial well-being. Budget Boss: 12 Tips for Managing Your Money Wisely
Ranking the Top and Bottom 24 U.S. Universities
![](https://wealthyliving.com/wp-content/uploads/2024/04/shutterstock_1843652080-1.jpg)
Wondering which universities are the cream of the crop and which ones fall short of the mark? Today, we’re ranking the 24 best and worst universities in the United States to give you the inside scoop on higher education excellence and disappointment. Are you ready to uncover the highs and lows of academia? Ranking the Top and Bottom 24 U.S. Universities
The Path to Self-Discovery: 15 Steps to Finding Your True Self
![](https://mamasaywhat.com/wp-content/uploads/2024/03/shutterstock_2231710273.jpg)
Embarking on a journey of self-discovery goes beyond mere introspection; it requires actionable steps backed by research to uncover your authentic self. Here are 15 evidence-based strategies and practical steps to get started on each. The Path to Self-Discovery: 15 Steps to Finding Your True Self
18 Trending Jobs That Let You Travel While Working
![](https://thegreenvoyage.com/wp-content/uploads/2024/03/shutterstock_2068194518-1.jpg)
Dreaming of turning your wanderlust into a way of life? Believe it or not, there are careers that not only allow but encourage you to explore the globe, dive into new cultures, and collect experiences instead of things. Here are 18 unconventional jobs that offer just that, with a bit more insight into each. 18 Trending Jobs That Let You Travel While Working
Grow Every Day: 14 Habits for Tangible Personal Progress
![](https://mamasaywhat.com/wp-content/uploads/2024/02/shutterstock_2288693023-1.jpg)
Ready to take your personal growth journey to the next level? Incorporating small, tangible practices into your daily routine can lead to significant positive changes in your life. From expressing gratitude to nurturing connections with loved ones, these 14 daily habits are designed to empower you to thrive and flourish. Let’s dive in and elevate your life one day at a time! Grow Every Day: 14 Habits for Tangible Personal Progress
The post Where Being Poor Costs More: 21 U.S. States’ Tax Blunders first appeared on Not Your Boss Babe.
Featured Image Credit: Shutterstock / Cast Of Thousands.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
Leave a Reply