As investors attempt to wring returns from a low-growth, low-rate environment, an individual’s tax burden weighs heavily on his or her ability to generate income.
According to WalletHub’s report, "2016's States with the Highest & Lowest Tax Rates," the state with the lowest overall tax rates is Florida, while the state with the highest is Illinois.
WalletHub reports that the taxes in the 10 most expensive states are three times higher than those in the least expensive states, and tax rates in Democratic Party-controlled blue states are more than 10 percent higher than those in Republican Party-controlled red states.
For the study, WalletHub analyzed and ranked each state according to four different types of taxation: income tax, real estate tax, vehicle property tax and sales and excise taxes.
No. 10: New Jersey
At 7.48 percent, New Jersey has the country’s highest property tax.
No. 9: Iowa
The median Iowan household pays a combined effective total state and local tax rate of 12.75 percent.
No. 8: Ohio
At 5.06 percent, Ohio has the 11th highest real estate tax in the country as well as income and sales taxes that rank above the national average.
No. 7: Michigan
Michiganders, on average, pay an effective total state and local tax rate of 13.09 percent.
No. 6: New York
New York’s high excise taxes, including a $4.35 tax on cigarettes and the country’s fourth-highest gas tax, provide an extra burden on consumers and savers.
No. 5: Rhode Island
In Rhode Island, the median household pays an effective total state and local tax rate of 13.46 percent.
No. 4: Connecticut
Connecticut has the fourth-highest cigarette excise tax in the country, according to WalletHub, only behind New York, Massachusetts and Rhode Island.
No. 3: Wisconsin
While Wisconsinites pay no vehicle taxes, their income and property tax burdens number among the country’s highest.
No. 2: Nebraska
With an effective rate of 6.12 percent, Nebraska has the seventh-highest real estate taxes in the U.S.
No. 1: Illinois
A median household in Illinois pays an effective total state and local tax rate of 14.54 percent. On top of that, Illinois is one of just 15 states that tax food and groceries.